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Tuesday , December 1 2020

Loan transfer

I have been working with an organization as an engineer for the past 2 years. I have a loan with one of the banks which I am due to pay installments for another few months.

My questions are:

1. If at all I get a good opportunity in another company somewhere in the GCC countries, is it possible to transfer the loan to another GCC country bank?

2. Do I need to clear the loan before I get a transfer.

Name withheld

Answer: Theoretically, it is possible if this Kuwait bank has a branch in the Gulf country to which you are planning to transfer but practically it doesn’t happen because they are too many things tied to the acquiring of a loan.

So, what we advise in such a case — in case you are travelling out to another country or transferring for whatever reason — is to transfer the loan to your guarantor or to some close friend, through an arrangement with the bank.

This is possible and has been done in many cases. In such an event, your friend guarantees to pay the monthly installment and you can keep paying your friend through whatever arrangement you set up with him. And yes, you need to clear the loan — or transfer the liability to a friend — before you leave the country because the bank has the right to force the guarantor of the loan to pay the monthly installments and if he/she doesn’t then the bank can initiate legal action against the guarantor.

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