Deed of Assignment of Loan
This Deed of Assignment of Loan covers the situation where a lender assigns its rights relating to a loan agreement to a new lender. Only the original lender’s rights under the loan agreement (i.e. the right to receive repayment of the loan, and to receive interest) are assigned. Since only the rights and not the obligations are assigned, the borrower does not need to be a party to the assignment deed. The parties will be the original lender and the entity who is buying the loan.
If the original lender still has obligations under the loan agreement (such as an obligation to make further advances to the borrower), please use a Deed of Novation of Loan (see above right).
For the sake of simplicity, it is easier if the date of assignment is an interest payment date. Otherwise a calculation will have to be made of interest which has accrued but remains unpaid.
You must check that assignment of the loan is permitted under the original loan agreement, as some loan agreements contain a prohibition on assignment, or it may be necessary to obtain the borrower’s consent prior to assignment. The Simply-Docs Short and Long Form Loan Agreements both permit assignment by the lender.
It is also important that notice is served on the borrower to alert them to the assignment of their loan. Failure to serve notice will mean that a legal assignment is not created. The requirement to serve notice is set out in the deed and this template has been updated to include the form of notice that should be served in a schedule to the deed as well as the form of acknowledgement that the borrower may return, acknowledging the assignment and the “new” lender.
Optional phrases / clauses are enclosed in square brackets. Unused options should be removed from the document.
This Deed of Assignment of Loan is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.
The document is a deed and so it should be executed by two directors or one director and a secretary of the Lender, the Borrower and the new party.
Once you have purchased access to the appropriate document folder click on the “Download Document” button below. You will be asked what you want to do with the file. It is recommended that you save the document to a location of your choice prior to viewing.