Joint Loan Removal

Inside_Man

A friend of mine wants to remove herself from her joint loan with Lloyds TSB, are they legally obligated to replace the joint loan with a seperate single loan?

jonesMUFCforever

Only if in their opinion the party left with the debt is creditworthy enough to be able to make the repayments.
At the moment your friend has joint and several liability for the loan ie the bank can go after both of them for the debt if they default.
With a sole account they are at a greater risk of not getting repaid.
There must have been a reason why it was done in joint names in the first place.

Inside_Man

because they wanted to share the debt, i understand all the joint and several stuff, just wanted to see if they had a similar obligation as they have with PPI

jonesMUFCforever

Sorry don't understand your point.
What has PPI got to do with your friend wanting out on the loan?
The only way that they would do it I think is to close off the old loan and open new loan with o/s amount. New CCA documentation would be required IMO.

Inside_Man

what it has to do with ppi is this,

if a customer wants to cancel his/her ppi with a bank they are legally obligated to remove it even if the applicant is declined.

the question i need the answer to is: does the bank have an obligation, in the same way they do with PPI, to remove a person from a loan if the person wished to be removed

regularsaver1

no they do not inside man

i don't get your bit about ppi though

the person to stay on the loan would apply for a new one in their name to pay off existing joint one

jonesMUFCforever

I agree they don't have to let your friend off the loan as I have previously posted.

claudefrog

can the party wanting to take the loan on singly not apply for a new loan, and pay back the outstanding balance on the old loan?

jonesMUFCforever

Yes but if they were in a position to do this surely they would have done it at the outset.
Banks prefer personal loans to be in sole names and joint loans are a bit of a last saloon really.