Loan Transfers – Discover Your Options (2026 Guide)

Imagine this: you've found the perfect way to streamline your finances, perhaps by transferring a loan to another person. But is it really possible? And if it is, what do you need to know to make it happen smoothly? Let's dive into the complexities of loan transfers and provide you with the information you need to make informed decisions.

Understanding Loan Transfers

Loan transfers, also known as loan assumptions or novations, involve transferring the responsibility of a loan from one person to another. This might be considered in situations like divorce, selling a property, or restructuring personal finances. However, not all loans can be easily transferred. The primary factor is whether the loan agreement allows for such a transfer, which often depends on the lender's policies and the type of loan.

In Australia, the capacity to transfer a loan is largely contingent on the lender's approval. Loans that are typically considered for transfer include mortgages, personal loans, and car loans. However, credit card debts and student loans are usually not transferable.

Loan Transfer Requirements and Options

When considering transferring a loan, the first step is understanding the requirements and options available. Here are some essential details:

• Lender Approval: Not all lenders permit loan transfers. It's crucial to check with your lender to see if they allow this process. If they do, they will likely have specific criteria that the new borrower must meet.
• Creditworthiness: The person assuming the loan must typically meet the lender's credit requirements, which often includes a credit score check and income verification.
• Fee Structures: Be prepared for possible fees associated with transferring a loan, such as administration fees or charges for reassessing the loan.
• Interest Rates: Interest rates for loan transfers can vary. As of 2026, typical rates for personal loans in Australia range from 6.49% to 12% depending on the borrower's credit profile and the lender’s policies.

Loan Type	Transfer Eligibility	Typical Interest Rates (2026)
Mortgage	Possible with lender approval	4.5% - 5.5%
Personal Loan	Varies by lender	6.49% - 12%
Car Loan	Possible with conditions	5% - 7%
Credit Card Debt	Not typically transferable	N/A

Steps to Transfer a Loan

Transferring a loan involves several steps. Here's a guide to help you through the process:

1. Review Loan Agreement: Check your current loan agreement to see if it includes terms for transferability.
2. Contact Your Lender: Speak with your lender to discuss the possibility of transferring the loan. They will provide specific guidance and requirements.
3. Identify a New Borrower: Find a person who is willing and able to take over the loan. Ensure they meet the lender's credit and income criteria.
4. Submit Application: Both you and the new borrower may need to submit applications or documentation to the lender for approval.
5. Approval Process: The lender will review the new borrower's application and decide whether to approve the transfer.
6. Complete Documentation: If approved, complete all necessary paperwork to finalise the transfer.

Tips and Considerations

When contemplating a loan transfer, consider the following expert tips:

• Communication is Key: Maintain open communication with your lender and the new borrower throughout the process.
• Be Prepared for a Rejection: Understand that lenders have the right to reject a loan transfer if the new borrower does not meet their criteria.
• Consider Refinancing: If a transfer is not possible, refinancing the loan might be an alternative solution. This can potentially offer better terms or rates.
• Seek Professional Advice: Consider consulting with a mortgage broker like Esteb and Co, who have access to 83+ lenders, to explore your options comprehensively.

Frequently Asked Questions

• Can I transfer my mortgage to someone else? Yes, but it requires lender approval and the new borrower must meet specific criteria.
• Are there any fees for transferring a loan? Yes, there may be administrative fees involved, which vary by lender.
• What happens if the lender does not approve the transfer? If the transfer is not approved, you may need to consider other options such as refinancing.
• Can I transfer a car loan to another person? It is possible, but similar to mortgages, it requires lender approval and the new borrower must qualify.
• Is it easier to transfer a loan with a co-signer? Having a co-signer can sometimes facilitate the approval process, as it adds an additional layer of security for the lender.
• Does transferring a loan affect my credit score? The process itself may not impact your score, but any associated credit inquiries or missed payments can have an effect.
• Can Esteb and Co assist with loan transfers? Yes, Esteb and Co can provide guidance and explore options with their extensive panel of 83+ lenders.