Inheritance document query

Originally posted by : ron mumbai
	Property was in the name of deceased father and there is a bank loan on property with son as co-applicant. What if they want to transfer the bank loan to another bank. Father's legal heirs are: wife, son, 2 daughters. How to simply clear the ownership title, with minimum documentation and cost. There is no dispute between the legal heirs. What document should be executed to move transfer the legal property rights in least cost and faster timeframe.

Discuss with Bank if you are unable to clear outstanding loan amount. 

If it is in instalments continue and discharge loan with consent of other lrs 

1. After clear the bank loan account,  file a petition for succession certificate from the court of law.
2. Closing loan account on the due date is called regular closure.
3. Closing the loan account prior to due date is pre-closure.
4. Inform the bank of the type of closure.
5. Ask for NOC (for regular closure) and NDC (for pre-closure)

Just hunt for the bank that can offer to take up an existing loan.   If the other bank is prepared to take over the existing loan, the process is simple.  The other legal heirs can sign the memorandum and also offer a third-party guarantee in an individual capacity.  As many banks have outsourced and have consultants, the agent will help in take over in a smooth manner without incurring any cost.

According to the scenario you have mentioned,

Yes, you can transfer a loan from one bank to another. All of the heirs would need to initially consent to chalk out a methodology to clear the debt. In case there is debt towards the ancestral property, the debt will be paid, out of the property before it can be distributed. 

The loan transfer process is simple. You just need to close your loan account first with the existing bank and then pay a transfer fee to your new bank. Your new bank will pay off the existing loan and you have to pay to the new bank in equated monthly instalments at a new rate of interest.

Once this is done, the property can be divided.

Hope it helps,

Regards,

Srishti