Loan Assigned to Another Company? What to Verify First
Got a letter saying your loan was assigned or sold to another company? Check these 7 things before paying anyone, and know where to complain under RBI rules.
In this article (7 sections)
A letter, SMS or email saying "your loan has been assigned to XYZ" can be genuine. Banks and NBFCs do sell loans to other lenders, and stressed loans are often sold to asset reconstruction companies (ARCs). Before you pay a single EMI to the "new" company, confirm the transfer with your original lender through its official channels, check that the new entity is RBI-regulated, and reconcile your outstanding balance.
This guide covers what a genuine transfer looks like, the seven things to verify, and where to complain if something is wrong. Rules are stated as of October 2026.
Why loans get assigned
A loan is an asset for the lender, and lenders sell or transfer these assets for many reasons:
| Situation | Who usually buys | What changes for you |
|---|---|---|
| Regular (performing) loan pool sale | Another bank or NBFC | Usually only the name you pay; often the old lender keeps servicing |
| Co-lending arrangement | Bank and NBFC share the loan | One entity stays your single point of contact |
| Loan in default or NPA | An asset reconstruction company (ARC) | The ARC or its agent takes over recovery and settlement talks |
| Lender merger or business sale | The merged or acquiring entity | Account numbers, apps and payment details may change |
RBI's directions on transfer of loan exposures (now in the 2025 "Transfer and Distribution of Credit Risk" Directions for banks, updated to 2026) allow such transfers between regulated entities. They also say a transfer must not affect the rights of the underlying borrower, and that a loan agreement should contain the borrower's consent for such transactions. In most loan agreements this consent is a standard clause you signed at the start.
The key point: your loan terms stay the same. The interest rate, tenure, EMI and charges in your sanction letter and Key Facts Statement (KFS) carry over. A transfer is not a fresh loan and is not a reason to charge you anything new.
Seven things to verify before paying
1. Confirm with the original lender, not the caller
Call the original lender on the customer care number printed on its official website or in your loan agreement, or write from your registered email. Ask three questions:
- Has my loan account been transferred, and on what date?
- To which entity, and who will service it (collect EMIs, issue statements)?
- What was my outstanding balance on the transfer date?
Ask for the answer in writing. A genuine lender will confirm. If the original lender says "no transfer", treat the letter as a likely fraud.
2. Check the new entity is regulated
Look up the new company's name on RBI's website. NBFCs and ARCs registered with RBI appear in RBI's published lists; banks are listed separately. If the "new lender" is not on any list, report it at sachet.rbi.org.in. Many fake "loan transfer" messages come from people who bought leaked loan data.
3. Match the account details
The letter from the new entity should show your name, the original loan account number, the original lender and the transfer date. Many genuine notices also give a new loan account number. Cross-check every detail against your sanction letter and latest statement.
4. Reconcile the outstanding balance
Ask the original lender for a closing statement (or account statement) up to the transfer date, and ask the new entity for an opening statement. The two numbers should match, apart from interest for the days in between.
Worked example:
Your original lender's statement shows ₹4,12,350 principal outstanding on 30 September. The new servicer's welcome letter, dated 10 October, shows ₹4,18,000 due.
- Your rate is 11% a year. Interest for 10 days on ₹4,12,350 = ₹4,12,350 × 11% × 10 ÷ 365 = about ₹1,243
- Expected balance on 10 October: ₹4,12,350 + ₹1,243 = ₹4,13,593
- Gap to explain: ₹4,18,000 − ₹4,13,593 = ₹4,407
Ask in writing what the ₹4,407 is for. If it is an old bounce or penal charge, it should appear on the original lender's statement and match your KFS. Any charge that is not in your KFS cannot be levied without your explicit consent under RBI's April 2024 KFS circular. Use our EMI calculator to check that your EMI and remaining tenure still match your original schedule.
5. Confirm where and how to pay
Get the repayment method in writing from both entities: a NACH mandate, an official app, the lender's website, or a bank account in the company's own name. RBI's Digital Lending Directions, 2025 require digital loan repayments to go directly into the regulated lender's own bank account, not through a third party's pass-through or pool account.
Never pay a "new lender" through:
- A personal bank account or a UPI ID in an individual's name
- A link received on WhatsApp from an unknown number
- Cash handed to someone without an official receipt
6. Check your existing auto-debit
If your EMI is on NACH or UPI AutoPay with the old lender, ask who will now present it. Sometimes the old mandate continues (when the old lender stays as servicer), sometimes you must register a new one. Do not cancel the old mandate until the new one is active and confirmed, or your next EMI may bounce. See EMI bounce charges and consequences for what a missed debit costs.
7. Watch your credit report
After a transfer, the old lender's tradeline usually shows "transferred" or "sold" and the new owner may open its own entry. Check your report with CIBIL, Experian, Equifax and CRIF High Mark one or two months later. A loan appearing twice as "active" can drag your score. Dispute it with the bureau; credit bureaus must resolve disputes within 30 days, and RBI's credit-information rules provide compensation of ₹100 a day for delays. Our guide on CIBIL report error disputes has the steps.
If your loan was sold to an ARC
An ARC usually buys loans that are already in default. Under the SARFAESI Act, 2002, an ARC that acquires a loan can use the same recovery powers the original bank had, including notices against secured assets.
What this means for you:
- You can still negotiate. ARCs often agree to settlements. Get any settlement offer in writing on the ARC's letterhead before paying.
- Recovery rules still apply. RBI's rules on recovery agents (calling hours of 8 am to 7 pm, no threats, no calls to relatives) apply to regulated lenders and their agents. Read loan recovery agent harassment rights.
- Settled is not closed. A settlement may show as "settled" on your credit report. Read loan settlement vs closure before agreeing.
- Get a no-dues letter. After the final payment, ask the ARC for a no-dues certificate and release of any security documents.
Your rights in summary
- Your sanction-letter and KFS terms continue after a transfer.
- No new fee or charge can be added that was not disclosed in the KFS, unless you explicitly agree.
- Recovery must follow RBI's fair practices and recovery-agent rules, whoever owns the loan.
- For digital loans, repayment must go to the regulated lender's own account.
- You are entitled to a statement of your account and, on closure, release of original documents.
Where to complain
- The entity now servicing the loan. Email its grievance officer and nodal officer (their details must be on its website). Copy the original lender.
- The original lender. If it cannot confirm the transfer, or the balance does not match, complain to its grievance officer too.
- RBI Integrated Ombudsman. If there is no reply within 30 days or you are not satisfied, file at cms.rbi.org.in or call 14448. Under the Reserve Bank – Integrated Ombudsman Scheme, 2026 (in force from 1 July 2026), file within 90 days of the 30-day window ending or the lender's last reply, whichever is later.
- Fraud. If someone posing as a "new lender" took money, report at cybercrime.gov.in or call 1930 immediately, and inform your bank.
Sample message to the original lender:
Subject: Request to confirm transfer of loan account [number]
I have received a letter dated [date] from [new entity] stating that my loan account [number] has been assigned to it. Please confirm in writing (a) whether this transfer is genuine and its effective date, (b) the entity that will service my loan and collect EMIs, (c) my outstanding principal, interest and any charges as on the transfer date, and (d) whether my existing NACH mandate will continue. Until I receive your confirmation, I will continue paying only through your official channels.
What not to do
- Do not pay anyone until the original lender confirms the transfer in writing.
- Do not share OTPs, PINs or net banking passwords with anyone claiming to be the new lender.
- Do not call numbers from the letter or a search ad without matching them to the company's official website.
- Do not stop paying EMIs while you verify; pay to the original lender's official channel and keep proof.
- Do not sign a new loan agreement or "transfer form" that changes rates or adds charges.
- Do not ignore SARFAESI notices from a genuine ARC; respond in writing within the period stated in the notice.
Key takeaways
- Loans can legally be transferred, but your rate, EMI and charges stay as per your original terms.
- Confirm any assignment with the original lender through its official website or registered email before paying.
- Check that the new entity is RBI-regulated and reconcile the balance on the transfer date.
- Pay only to accounts or mandates in the regulated company's own name, never to personal UPI IDs.
- Check your credit report after the transfer and dispute duplicate entries with the bureau.
- Complain to the servicer's grievance officer, then the RBI Ombudsman after 30 days.
Frequently asked questions
Can a bank or NBFC sell my loan to another company?
Yes. RBI's directions on transfer of loan exposures allow regulated lenders to transfer loans to other regulated entities, and stressed loans can be sold to asset reconstruction companies under the SARFAESI Act. Your loan agreement usually contains a clause allowing this, and the transfer does not change your basic loan terms.
Does my interest rate or EMI change when my loan is assigned?
It should not change only because the loan was transferred. The new owner steps into the old lender's position under the same agreement. Any later change in rate or charges must follow the terms you signed and RBI's fair practices rules, with notice to you.
Where should I pay EMIs after my loan is assigned?
Pay only through the account, mandate or payment link that both the old lender and the new lender or servicer confirm in writing through their official channels. Never pay to a personal bank account or personal UPI ID, even if the caller quotes your loan details.
My loan was sold to an ARC. Will my CIBIL report change?
The old lender's account usually shows as transferred or sold, and the new owner may report the account under its own name. Check all four bureau reports a month or two after the transfer and dispute any duplicate or wrong entry with the bureau.
Who do I complain to if the new lender or servicer is wrong?
Write first to the grievance or nodal officer of the entity now servicing the loan, and copy the original lender. If there is no reply within 30 days or the reply is unsatisfactory, file with the RBI Integrated Ombudsman at cms.rbi.org.in, provided that entity is covered by the scheme.
This article is for general education and is not personalised financial, tax or legal advice. Rates and rules are as of 27 Oct 2026; confirm current terms with your lender, AMC or a qualified adviser.
