Can You Remove a Cosigner from a Car Loan?

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - May 7, 2019

A cosigner is someone who signs on the loan with you and lets you “borrow” their good credit, but after some time, you may find that you don’t want them on the loan anymore. If you’re looking to remove a cosigner from your car loan, the only way you can do this is by refinancing the loan.

Removing a Car Loan Cosigner

In order to remove a cosigner from an auto loan, you need to qualify for refinancing on your own. You aren’t going to be able to just meet with your lender, say you want a cosigner off the loan, sign some paperwork, and be free and clear. There’s a reason why you had a cosigner on the loan initially, and the lender is going to make sure that you can handle the car loan by yourself before approving you for refinancing.

You can either go to your current lender, or shop around for a different lender to compare rates and terms, and your cosigner doesn’t have to be present during the refinancing process.

To qualify for refinancing, you generally need to make sure that enough time has passed since signing for the original loan. Typically, around two years must have passed during which you made regular monthly payments along with paying all your other bills. However, if your credit score hasn’t improved much, you may not qualify for refinancing.

Other Benefits of Refinancing a Car Loan

Besides giving you the chance to remove a cosigner, refinancing comes with other benefits as well. If you took out a bad credit auto loan, you probably have an interest rate that’s higher than average, possibly even in the double digits. If you qualify for refinancing, you get the chance to lower your monthly payment by qualifying for a lower interest rate, extending the loan term, or both.

If your credit has improved, the best way to lower your monthly payment through refinancing is with a better interest rate. You can save money on interest charges and lower your monthly payment at the same time, making it a win-win scenario.

If your credit hasn’t improved much, and you need a lower monthly payment, you can choose to extend the car loan term. But if your interest rate stays the same when you extend the loan, you’re going to end up paying more in interest charges over the loan term.

Need Help Finding a Dealership?

As long as you meet the lender’s refinance requirements, you shouldn’t have a problem removing a cosigner. If you’re looking to refinance, our partner RateGenius wants to help you get a better deal on a loan.

If you’re not sure about refinancing, or are looking to get a loan, we can get you connected to a dealership that has the lending resources available to help you with auto financing.

At CarsDirect, the nationwide network of dealers we work with are equipped to handle all different types of bad credit situations. Getting started is easy, just fill out our free-of-cost car loan request form, and we’ll get right to work connecting you.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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