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Can You Transfer Personal Debt to Business? Complete Guide

Transfer Personal Debt To Business

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

Personal debts can be transferred to a business credits card rather easily.

However, make sure you know that just because you can, doesn’t mean you always should.

Like any other important decision, it’s necessary that you find out the pros and cons of transferring personal credit to business credit.

I will help make sure that you know about all and any outcomes if you transfer your personal debt to a business credit card.

Personal Debt vs Business Debt

Personal debts are any debts that a person may make by taking consumer loans for purchasing things that are consumable.

On the contrary, business debts refer strictly to the money your company owes to another company or person.

Unless you gave a personal guarantee for a particular business loan, your consumer and business credits are not associated in any way.

There is a relationship between your consumer and business credits, but this only makes minor effects on each of the credits.

For instance, if you have a bad consumer credit, there’s only the slightest chances of your new business loan non approval because of this. In fact, if your company is new, the chances are even lower.

But to get a loan for your company approved, you will have to place a personal guarantee. This means that on a long term, your consumer credits will be affected by your business credits.

So, even if you try to keep the two credits separate, it’s nearly impossible to do so. But again, this should not be a struggle, considering their effects on each other are minor.

can you transfer personal debt to business

Can You Transfer Personal Debt to an LLC?

It’s not easy to transfer your consumer debt to LLC even if you are able to do so, and it’s also not the best idea.

If anyone would want to transfer their debt to their LLC, it would be an effort to dodge the debt. And even if you transfer your debt, it will not only remain, but it will also alleviate through some fees, etc.

If you are looking to transfer your consumer debt just so you can ease down the process of payments, much won’t change again.

Is It a Good Idea?

If you are able to transfer your consumer debt to your LLC, it will not only become higher due to some extra fees, etc., but also won’t become any less of a burden.

Because of course, even if you are transferring a debt off your consumer credits to some corporation, it will still be your responsibility.

So, unless you have a solid reason for doing so, there’s no significant reason why you should transfer your consumer debts to your company debts.

Can You Transfer Your Personal Credit Card to a Business?

Yes, you can transfer your consumer credit cards to company cards.

People might want to transfer their consumer credits to their business credits if they have used their consumer credit cards to make financial investments and fundings for their, let’s say, new company.

However, in financial terms, there isn’t much that this transfer does from you – say, save you from debts, etc.

For instance, if you are transferring a bad credit history, dealing with it through your company credits won’t become easier. 

The most it can do is help you keep a better track of your new company’s financial history. 

Similarly, if you are taking this step to protect your consumer credit from any financial mishap that your company might suffer from, you will still be at minor harm.

This is because for most credit card companies, a personal guarantee is an essential requirement when you apply for a loan from the company’s credit card.

I still recommend that you always keep your company and consumer credit cards separately to keep a better track of where your company is headed financially. 

Also because on a long term, it’s bebalance neficial in terms of lower interest rates in some cases, and no interests in rare cases.

Can You Do a Balance Transfer on a Personal Loan?


Not only is transferring balance on a consumer loan possible, but it is also usually recommended.

This is because balance transfers are done to save yourself from hiking interest rates of some credit card companies, and it works for sure.

There are a number of factors that are affected by this.

For instance, if the two credit cards you are switching between have different limits, the score will be affected.

However, if you really think through the advantages of making this switch, it’s highly beneficial. It saves your money from being spent on high-interest rates, and going straight to your debt, which obviously makes it easier to pay off.

Can You Transfer a Debt to Someone Else?


In fact, there can be a list of good reasons why you should do so. 

For example, if you are transferring your debt to your parent’s credit card which offers lower interests rates, then it’s a great idea to pursue.

The only deal with transferring debts is that you should never do it to put responsibility over someone else, your only motive should be looking for a way to pay off the debt in an easier and cheaper way.

So, the best way to do that would be transferring balance from your credit card to your parent’s or your spouse’s, etc., but make sure you let them know it will still be your job to pay it off.


Can I sell consumer debt?
Yes, but it’s hard to get your way around it. Unless you have a previous written agreement, it will be hard to sell off your debt to a collection agency or so on, so it’s just an added struggle for you. Especially considering that there isn’t much benefit of doing so, you won’t be saving considerable money. I recommend that you negotiate with your creditor through other ways and new payment plans, unless they want you to sell your debt.
How does balance transfer work for credit cards?
Balance transfer is the process of transferring from one credit card to the other to pay off high interest debts with comparative ease. If you owe a high debt interest to a particular credit card company with a high interest rate, you can get a transfer of balance done to a credit card company that offers lower interest rates. This way you will pay more money towards the actual debt each month than just high interests.
Can a personal lawsuit affect my LLC?
All your personal financial matters are completely separate from your LLC. No creditors can claim your LLS for a personal debt or any lawsuit against you. However, since LLC is also an asset of yours, there might be a few legal complications and procedures that would include money collection through LLC. Because if you need to pay them an amount for any lawsuit, you need to bring the money from wherever you might have, even if that means taking a debt.
Does an LLC affect personal credit?
Your LLC cannot affect your consumer credit. However, a lot of times, a person’s consumer credit score ends up being affected by their business because they use their private financial resources to fund their business. But as far as LLC is concerned, the answer would be no.
Do business credit cards affect personal credit?
Although it’s tried that your business credit is kept as far as possible from your consumer credit, it’s sort of impossible. This is because each business credit card needs a personal guarantee. So to some extent, if your business credit goes downhill, it will be affecting your consumer credit. If you’re still confused, you can try contacting an independent charity such as StepChange or Payplan for further debt advice.

Wrapping it Up

With every decision that seems like the right idea – some cons are supposed to be looked at. 

This doesn’t mean that your financial decisions are wrong or harmful or anything of that sort, it’s just that it’s necessary to know what you could be dealing with.

If you have any questions, feel free to reach out. I’d love to help.


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