Can You Remove a Cosigner From a Car Loan?

When you’re trying to get approved for a car loan in St. Louis, sometimes, a cosigner can make the process easier and less hassling. It’s generally easy to find a cosigner in a friend or family member, and the benefits can be great. However, if you already have a loan and are wondering, “Can you remove a cosigner from a car loan,” the answer is yes. Depending on your car loan, it can be as easy as contacting your lender to get a cosigner released. Learn more about how to get a cosigner off a car loan below.

What’s the Purpose of a Cosigner on a Loan?

The role of a cosigner is to make it easier for the borrower to get approved for a car loan — or any type of loan. If a borrower doesn’t have a high enough credit score or no credit, or doesn’t earn enough income to qualify for a car loan on their own, a cosigner can help improve their chances of getting approved. The addition of a cosigner can often help satisfy the lender that the loan will be repaid because if the borrower can’t make payments, the cosigner will. This is why it’s important that before cosigning a loan, a cosigner makes sure they can fit the loan payments into their budget.

How to Get a Cosigner Off a Car Loan

• Refinance the Loan: If you’d like to remove an ex-spouse as a cosigner, for example, you may be able to refinance the loan. In the case of a divorce, divorce decrees don’t mean the borrower and cosigner are released from the terms of the contract. This means if the ex-spouse who’s obligated to make the monthly payment doesn’t, the credit scores of both the borrower and cosigner will be negatively affected. Refinancing in your name will remove the cosigner and the loan will become your sole responsibility.
• Cosigner Release: Another option is to check if the car loan has a cosigner release option. Some car loans include policies that remove cosigners’ obligations after a certain number of payments have been made by the primary borrower (in full and on time). If your loan has this option, contact the lender and check your loan documentation to learn more about your options.
• Sell the Car and Pay Off the Loan: If your name is on the car title, you can sell the car to someone else and use the money to pay off the loan, freeing both you and the cosigner from any obligation.

Learn More About Auto Financing from Green Light Auto Credit

So, can you remove a cosigner from a car loan? The short answer is yes, but you’ll need to refinance, sell the car and pay off the loan, or take advantage of cosigner release options that exist for your loan. If you have additional questions about auto financing near St. Louis, Herculaneum, or Florissant, contact us at Green Light Auto Credit!

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