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This Practice Note explains one of the key ways a lender can transfer a loan under English law to another lender by assignment.

The other key ways are:

1. •

   novation—see Practice Note: Transferring a loan by novation, and

2. •

   sub-participation or risk–participation—see Practice Note: Selling a loan by sub-participation

A loan (which is a debt) is a chose in action. A chose in action is something which is recoverable by legal action (as opposed to something which is physically possessed). As a basic principle, choses in action cannot be assigned at common law.

Assignments of choses in action are therefore either:

1. •

   statutory—often referred to as 'legal' assignments because they have an equivalent effect to legal assignments, or

2. •

   equitable

Under English law, an assignment is a transfer of rights; it does not transfer obligations (in contrast to a novation—see Practice Note: Transferring a loan by novation).

This Practice Note discusses:

1. •

   requirements for a legal assignment

2. •

   how legal assignments differ from equitable assignments

3. •

   the advantages and disadvantages of assignments as a method of transfer, and