How Do I Get My Name off a Car Loan After Divorce?

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Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


, Contributing Writer - May 12, 2020

After a divorce, possessions (especially big-ticket items) tend to get divided up between the ex-spouses. So, what happens to a car that only one of you drives when both of you are on the title?

Co-Borrowers on a Car Loan

Even if you’re no longer driving the vehicle that both you and your ex are co-borrowers on, it can still affect your credit if there’s a missed payment – even if the divorce decree says your spouse is responsible. It doesn’t matter who's currently using the car. Since both names are on the loan and the vehicle’s title, you’re equally responsible for the auto loan. The same goes for a possible default or repossession, which can drastically lower both of your credit scores.

Good news, though – you can remove your name from the loan and get your name off the title. This can be done by refinancing the car loan and making either one of you the sole owner of the vehicle.

Refinancing is the only way to remove a co-borrower from an auto loan. However, if you want to get your name off the car loan, your ex needs to qualify for refinancing and prove they can afford the payment on their own.

Qualifying for Refinancing

To determine if your ex can refinance the loan and remove your name from the title, there are a few boxes that need to be checked. Lenders vary in their requirements, but here are the general rules for refinancing:

  • The vehicle must have equity (you owe less on the car than its cash value).
  • The auto loan has to be at least a year old.
  • The vehicle needs to have fewer than 100,000 miles.
  • The car must be less than 10 years old.

If the vehicle meets these requirements, your ex could be well on the way to refinancing and removing your name from the title.

However, there are also income requirements that need to be met. If your ex decides to refinance and can’t make the car payment by themselves, you probably won’t be able to get your name removed from the loan. However, refinancing doesn’t just remove co-borrowers off a loan.

Change the Loan Terms

Refinancing replaces the original loan with a new one. This is usually done to lower the monthly payment either by getting a better interest rate or extending the loan term. Not only can your ex remove you from the loan with refinancing, but they may also be able to adjust the loan terms to make the monthly payment more manageable.

If your ex’s credit score has increased since the start of the loan and they’re current on the payments, they may be able to qualify for a better interest rate. This saves borrowers on interest charges throughout the loan term, lowers the monthly payment, and is the ideal way to refinance.

Another way to refinance is by extending the loan term. Extending the loan doesn’t save money in the long run if the interest rate stays the same (borrowers actually pay more in interest charges this way), but it lowers the monthly car payment.

Your ex can also do both – lower the interest rate and extend the loan term if they qualify. So, they may be able to refinance the loan, remove your name, and lower the monthly payment so they can afford the vehicle by themselves.

Getting Into Another Car After Divorce

After a divorce, credit scores tend to drop due to the splitting of finances, on top of the additional costs of separating. And if you’re left without a car at the end of the divorce, a lower credit score could make getting transportation more difficult, but it's possible with the right kind of lender.

If you’re looking for your next auto loan, look to us. At CarsDirect, we’re teamed up with a nationwide network of special finance dealerships that help bad credit lenders. These lenders work with all types of unique credit situations and use more than just your credit score for car loan approval. To get matched to a dealer near you, simply fill out our free auto loan request form.

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, Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


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