If a loan borrower passes away, how can the loan be transferred to another person? What steps and documents are needed from the legal heirs and the new borrower?

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Law Forum › Category: Civil › If a loan borrower passes away, how can the loan be transferred to another person? What steps and documents are needed from the legal heirs and the new borrower?
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Apni Law Staff asked 2 years ago

If a loan borrower passes away, how can the loan be transferred to another person? What steps and documents are needed from the legal heirs and the new borrower?

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Apni Law Staff answered 2 years ago

If a loan borrower passes away, the loan liability usually transfers to their legal heirs. The heirs can either repay the loan or transfer it to another person. This involves obtaining a No Objection Certificate from the lender, a legal heir certificate, and the new borrower’s KYC documents. The lender may require a fresh loan agreement with the new borrower.

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