Credit transferred through debtor change Is it easy to do?
In order for you to be able to transfer a loan or make a so-called “debtor change”, you have to consider a few. There are certainly different reasons why you want to have a loan rewritten. Both private and financial reasons can play a role here. The following article tells you how to transfer a loan to someone else and whether banks need to accept the person.
The different types of credit
Millions of people in Germany currently have to repay a loan or loan, and the type of loan or loan is as diverse as the borrowers themselves. So of course there is the normal and classic consumer credit for the purchase of goods of all kinds or simply put, a credit for free disposal.
There are also loans for financing
- a vehicle,
- Business loans and
- real estate loans
However, mortgage lending is probably the largest form of financing and thus becomes a little more complicated when it comes to transferring loans.
Unfortunately, because life does not always go according to plan, the borrower may or may not be able to repay the current loan during such a loan term. One solution would be to change borrowers or change borrowers, for example. But can a loan be transferred at all and what does it look like if you want to have a home loan rewritten?
All types of loans are generally always personal, or in the case of two borrowers, two people. If you want to transfer a loan or rewrite a house, it is always a change of debtor.
In this context, the previous borrower assigns the current loan to another person, so the loan is transferred. However, in order for the current borrower to be released from responsibility and liability, the consent of the bank or the creditor must be available.
What is the risk of taking out a loan?
When you transfer a loan, of course all your previous obligations and rights are automatically transferred to the new borrower. Conditions, the amount of the remaining loan amount and all parts of the contract are retained. Therefore, transferring a loan also poses a certain risk when taking over the loan. Because the new lender comes into a loan obligation overnight and now bears the full responsibility for it.
You should keep this in mind when transferring a loan
There are some important differences within the change of debtor, because there are several options for rewriting a loan. On the one hand, there is the simple assumption of debt, with the borrower paying the monthly repayment installments. However, the former borrower remains liable. This contract can therefore only be concluded between the two parties concerned, without the consent of the bank.
The approval of the bank has to be obtained according to $ 415 USD, however, if it is a release of debt. Here you, as the old debtor, are released from your debts by the new debtor. From a legal point of view, it is about a real change of debtor, i.e. with the consent of the lender.
When you want to transfer a loan, the person should usually meet these criteria:
- permanent, permanently registered residence in Germany
- Account with a German bank
- appropriate credit rating
- an unlimited employment relationship
- a fixed monthly income of a certain amount
Before the loan can be transferred, the lender will carefully check the creditworthiness of the new borrower. If the bank does not find them to be good enough, there may be situations.
- the transfer is rejected and the old debtor remains obliged to repay the loan
- under certain circumstances, the old debtor as a guarantor or second contract holder can remain responsible and liable
- additional collateral can be requested from the new lender
Reasons why a loan transfer can make sense
If you want to rewrite a home loan or transfer a loan, there can be a variety of reasons and situations. For example, you can no longer afford the monthly repayment installments and would become in debt. Then the bank could even cancel your loan entirely.
However, you may also become unemployed or seriously ill. If you have not taken out credit insurance in this case, you must continue to service the loan.
Rewrite a real estate loan
A real estate loan is usually one of the most permanent ties to a bank. There are always comparably high sums in the room, which automatically leads to the borrower being in the repayment phase for several years or decades. But with a home loan, the time does not stand in between and massive changes can occur. Having the home loan rewritten is used more often than is generally thought. The legal basis is based on $ 415 USD (German Civil Code).
Divorces, separations, deaths, etc. are just one of the reasons why it may be necessary to have a home loan rewritten. And of course there is also a risk here when taking out the loan. For example, it may be that if the parents have overdue the payment obligation in the long term, then there will also be a compulsory auction immediately.
In order to prevent such compulsive sales, the children or the child can claim or take over the house loan from the parents. This would ensure a further payment of the monthly installments. However, the bank must agree to this. As a rule, a forced auction is a greater effort for the banks, so you usually agree to a loan assuming the conditions are met.
Once again, there would be a relevant review of the new borrower in connection with a contract free of form, which precisely describes the circumstances transferred from the loan.