Am I responsible for the interest accrued on a loan that was transferred to a new financial institution but I was given no billing information?
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Am I responsible for the interest accrued on a loan that was transferred to a new financial institution but I was given no billing information?
My student loan was transferred to a new bank and I didn’t receive any billing or payment information for 1.5 years from the new loan holder. My institution stopped sending me payment requests and sent me a transfer letter stating that I would receive instructions from the new holder (this was 3 years ago) but I didn’t receive any payment requests until about 5 months ago. I called to get more info from the new bank but they had very little info and seemed shady. They said they would call me back. Am I even legally binded to the new loan if I never signed anything or received any interest rate, payment etc. info?
Asked on May 15, 2012 under Bankruptcy Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Your consent is not required to transfer (sell or assign) your loan to a new institution. The new institution can only charge you amounts or interest allowed by the loan agreement(s) you you had signed; that is, when it takes over the loan, the new lender steps into the shoes of your original lender and is bound by the loan terms. Therefore, regardless of notice or consent, if someone took assignment of the loan from your old lender, you will owe them anything which you would have legally owed the old lender over that period of time.
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