- As the co-signer, there are three primary options to remove yourself from the loan — request co-signer release, refinance, or pay off the loan.
- If you’re the primary borrower, you can release the co-signer by requesting a co-signer release, refinancing the loan, paying the loan off, or selling the vehicle.
- Remaining cooperative is key, especially in situations where the relationship to the borrower may be tense.
4 Ways To Remove Your Name From A Co-Signed Car Loan
Ask For A Co-Signer Release
The simplest option is to ask the primary borrower to release you from the loan. While not all lenders offer co-signer release, it’s worth checking with them to explore your options.
Keep in mind that lenders have different criteria for release, such as requiring the primary borrower to have made a certain number of on-time, in-full payments before being eligible. If you’re unsure whether the lender allows for co-signer release, contact them to explore your options.
Removing a co-cosigner from the loan can also impact its terms. For instance, if the co-signer’s credit was beneficial in securing a better interest rate, the primary borrower’s rate may increase if the co-signer is removed. Thus, it’s crucial to discuss the potential impact of removing yourself from the loan before doing so.
Ask The Borrower To Refinance
Refinancing allows the borrower to obtain a new loan to pay off the initial one, ultimately releasing you from the initial loan. This option can be advantageous for the borrower as well, as it may provide them with a better interest rate or terms, or more affordable payments.
However, being approved for refinancing is contingent on having a solid credit and payment history. If the borrower doesn’t meet these requirements, securing a refinance loan may prove challenging.
Pay Off The Loan
In situations where the primary borrower is uncooperative, paying off the loan in full may be the most efficient way to remove yourself from the loan without their consent. Although this approach requires forking over a potentially substantial amount of money, it offers a quick and hassle-free solution.
To do this, contact the lender and inquire about the remaining loan balance. If you can afford it, request to pay the remainder of the loan off.
What To Do If You’re The Primary Borrower
If you’re the primary borrower of the loan, you’ll have a bit more control over the situation. Consider the following three options to remove the co-signer.
Co-Signer Release
If co-signer release is available, contact your lender to remove the co-signer. In most cases, you’ll need to have met certain requirements, like having made on-time and in-full payments for at least a couple of years. However, if you’ve met the requirements, a bit of paperwork is all it’ll take to relieve the co-signer of their obligations.
Refinance The Loan
If co-signer release isn’t an option, consider refinancing. While you’d need to secure a new loan, it could result in more favorable terms while simultaneously releasing the co-signer from their obligations.
Pay Off The Loan
If you have the means to do so, consider paying the loan off in full. This option means you need the cash upfront, but it’s a quick way to remove both yourself and the co-signer from the loan.
Sell The Car
Selling the car can be a viable option for removing the co-signer, especially if other methods have proven unsuccessful. Use the proceeds from the car sale to pay the remainder of the loan. Once you do, both you and the co-signer will be removed from the loan.
Cooperation Is Key
Removing a co-signer can be a time-consuming, frustrating process, especially if one or both parties are uncooperative. Whether a falling out, divorce, or a simple desire to be free from the loan has sparked this decision, remember to remain cooperative. The better you two are able to work together, the easier the removal process will be.
