Can banks assign their loan contracts to other firms?

Yes, banks can assign their loan contracts to other firms, a process known as loan assignment or loan transfer. This typically occurs when banks sell loans to other financial institutions, investors, or asset management companies to manage risk, improve liquidity, or optimize their balance sheets. However, such assignments generally require compliance with legal and regulatory requirements, and borrowers are often notified of the transfer. The original terms of the loan usually remain unchanged despite the assignment.