Can You Remove a Cosigner from a Car Loan?

If you’ve been considering adding a cosigner to your auto loan, you may be wondering about removing a cosigner from your auto loan. Can you remove a cosigner from your auto loan? Yes, you can! However, you may have to jump through a few hoops. When it comes to how to remove a cosigner from a car loan, restrictions and options vary from lender to lender. Find out how to remove a cosigner from a car loan today with the Victory Mitsubishi finance team!

Why Have a Cosigner on a Car Loan?

Including a cosigner can help you secure a car loan if you have had credit issues or if you don’t have any credit. Having someone with a higher credit score vouch for you makes you a more attractive option for lenders. A cosigner can:

• Instill lender confidence if your credit is low due to missed payments or you have a high debt-to-income ratio.
• Offers a backup for the lender, as your cosigner is supposed to step in and make payments in the event that you fall behind.

It’s important to note, however, that if you miss payments or don’t make payments on time, your cosigner will be negatively impacted. They can be expected to make the missing payments and their credit score can suffer as well.

Why Remove a Cosigner From an Auto Loan?

Even if you’re consistent with your payments, a time could come where either you or your partner might want to remove their name from the loan. After all, the amount of debt in their name could prevent them from taking out their own auto loan, purchasing a house, and more.

How to Remove a Cosigner From an Auto Loan

Removing a cosigner from an auto loan is almost always possible. First, we suggest speaking with the lender about how to remove a cosigner from an auto loan. When you have them on the phone, you’ll want to discuss the following options:

• Refinancing Your Loan – Refinancing a loan is the process of working out new loan terms with your lender or a new lender. If you’re able to refinance on your own, your cosigner’s name can be removed from the loan. This approach can be useful if your credit score has increased since you originally took out the loan.
• Cosigner Release – Some contracts include an option for a cosigner release. This allows you to remove the cosigner’s name in the event you’ve made enough on time payments.
• Sell Your Car & Pay Off Your Loan – If other options don’t work out, selling your car and using that money to pay off your loan is an option. Once your loan is paid off, any obligation from the cosigner is removed. However, if you’re underwater on your loan, it will likely require some additional capital on your part to pay off the loan.

Explore Financing Options With Victory Mitsubishi!

You’ve learned how to remove a cosigner from a car loan, but Victory Mitsubishi’s finance team can help you explore all of your financing options for your new vehicle purchase. Apply for financing online, or reach out to us to discuss your finances with our team!