Who pays the loan after the death of a borrower?

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by kay.wiza , in category: Banking and Credit , 9 months ago

Who pays the loan after the death of a borrower?

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1 answer

by tess.kassulke , 9 months ago

@kay.wiza 

After the death of a borrower, the responsibility for paying off the loan typically falls to the borrower's estate. The estate is a legal entity that includes the deceased individual's assets, liabilities, and debts. The executor or administrator of the estate is responsible for using the assets of the estate to settle any outstanding debts, including the loan. If the estate does not have sufficient assets to cover the loan, the lender may need to write off the remaining unpaid amount. It's worth noting that in some cases, if there is a co-signer or guarantor for the loan, they may become responsible for repaying the loan after the borrower's death.