Transfer Loan – Control Your Finances (2026 Guide)

You've worked hard to secure a loan, but now circumstances have changed. Whether you're facing a major life event or simply helping out a loved one, transferring a loan to another person might be on your mind. But how feasible is it in Australia's current financial landscape? You're not alone in seeking clarity on this matter.

Understanding Loan Transfers

In essence, transferring a loan to another person means shifting the responsibility of repayment from yourself to someone else. This process can be particularly appealing in situations like divorce settlements, family financial rearrangements, or when selling a financed asset. However, it's essential to understand that not all loans are transferable, and the process can be complex.

Key Information on Loan Transfers

Loan transfers aren't a common practice across all types of loans. The ability to transfer depends heavily on the type of loan and the lender's policies. Here's what you need to know:

In 2026, the average home loan interest rates in Australia range between 6.49% and 8.25%, with personal loans generally falling between 7% and 12%. Transferring a loan might affect these rates, depending on the new borrower's creditworthiness and market conditions.

Steps to Transfer a Loan

If you're considering transferring a loan, here are the steps you should follow:

1. Review the Loan Agreement: Check if your loan agreement allows for a transfer or if there are any clauses that might prevent it.
2. Contact Your Lender: Speak with your lender to discuss the possibility of a transfer. They can provide specific guidance based on their policies.
3. Assess the New Borrower's Eligibility: The person taking over the loan will need to meet the lender's requirements. This includes creditworthiness and income verification.
4. Submit a Formal Request: If the lender agrees, you'll need to submit a formal request to transfer the loan. This might involve documentation and possibly a fee.
5. Sign New Agreements: If approved, the new borrower will need to sign a new loan agreement with the lender.

Tips and Considerations

Here are some expert tips to keep in mind if you're thinking about transferring a loan:

• Explore Alternatives: If a transfer isn't possible, consider refinancing options or co-signing arrangements.
• Understand the Costs: Be aware of any fees or charges associated with transferring a loan.
• Consult with a Broker: At Esteb and Co, we have access to over 83 lenders, offering a wealth of options that might suit your needs better than a transfer.
• Impact on Credit Score: Consider how transferring a loan might impact your credit score and that of the new borrower.

Frequently Asked Questions

• Can I transfer my mortgage to a family member?
  While it's possible, it requires lender approval and the family member must meet the eligibility criteria.
• Are there fees involved in transferring a loan?
  Yes, there can be administrative fees, and possibly new loan setup fees for the new borrower.
• What if my lender doesn't allow loan transfers?
  Consider alternatives like refinancing or selling the asset and using the proceeds to settle the loan.
• Will transferring a loan affect my credit score?
  It might, especially if there are delays or complications in the transfer process.
• Is a loan transfer the same as refinancing?
  No, refinancing involves replacing the existing loan with a new one, often with different terms, whereas a transfer moves the loan responsibility to another person.
• How long does the loan transfer process take?
  It can vary significantly but typically takes several weeks, depending on the lender's requirements and the complexity of the situation.