Can You Remove a Cosigner from a Car Loan?

Getting approved for an auto loan can be quite difficult if you’re someone with a rough credit history–or you have little to no history. As a result, when looking for a new Ford in the Columbia area, you may need to have a co-signer to qualify for an auto loan.

However, what happens if you’d like to remove a cosigner from a car loan? Is this possible? While the process can be a bit tedious, you can remove a cosigner from an auto loan! Restrictions may vary from lender to lender, but most offer customers a way to adjust their loan or contract. Read this guide by the finance centers at Jim Hudson Ford on how to remove a cosigner from an auto loan.

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Why Would You Need a Cosigner on an Auto Loan?

Irmo shoppers with a poor credit history–or little to no credit history–will find that adding a cosigner is one of the best ways to make them look like a better investment to lenders. Here are some reasons why having a cosigner on an auto loan can be highly beneficial:

If you have a low credit score due to missed payments or a high debt-to-income ratio, adding a second name to the loan proves that someone trusts you to pay back the balance.
Having a car loan cosigner adds a protective buffer for the lender because the partner is expected to take over the payments if you fall behind.
However, the downside of having a car loan cosigner is that they’re putting themselves at a financial risk. If you fail to pay back your loan, or you miss any payments, it will leave a negative mark on their credit report.

Even if you’re making timely payments, you or your partner may still be wondering how to remove a cosigner from a car loan; especially considering that this debt in their name can prevent them from taking out another loan.

How to Remove a Cosigner From an Auto Loan

Removing a cosigner from an auto loan is possible. When you contact your lender, here are some options that you can discuss with them:

Refinance Your Loan - ‘Refinancing’ means working out new loan terms with the same, or different, lender. If you’re able to refinance by yourself, your cosigner’s name will be removed from your loan, and you may even get a better interest rate. This is a great option to consider if your credit score has increased since you initially took out the loan.
Cosigner Release - Review the fine print of your contract to see if there’s an option for co-signer release. If you’ve made an adequate number of on-time payments, some contracts will let you remove the cosigner’s name and remove their risk right away.
Sell the Car and Pay Off Your Loan - If the previous options don’t work out, you can choose to sell the vehicle and pay off the loan in full. However, selling the vehicle is only a viable option if you’re not underwater on your car loan. This option will immediately remove your cosigner’s (and your own) obligation.

Get More Automotive Information from Jim Hudson Ford!

Can you remove a cosigner from a car loan in Chapin! As you can see, this is possible! If you’d like to talk through your options, or if you have any additional questions regarding auto loans, contact our finance department today. Also, be sure to get answers to more popular questions like, “What is a good interest rate for your car loan?” and “Can you trade in a financed car?”

Although every reasonable effort has been made to ensure the accuracy of the information contained on this site, absolute accuracy cannot be guaranteed. This site, and all information and materials appearing on it, are presented to the user "as is" without warranty of any kind, either express or implied. All vehicles are subject to prior sale. Price does not include applicable tax, title, and license charges. ‡Vehicles shown at different locations are not currently in our inventory (Not in Stock) but can be made available to you at our location within a reasonable date from the time of your request, not to exceed one week.

Although every reasonable effort has been made to ensure the accuracy of the information contained on this site, absolute accuracy cannot be guaranteed. This site, and all information and materials appearing on it, are presented to the user "as is" without warranty of any kind, either express or implied. All vehicles are subject to prior sale. Price does not include applicable tax, title, and license fees. ‡Vehicles shown at different locations are not currently in our inventory (Not in Stock) but can be made available to you at our location within a reasonable date from the time of your request, not to exceed one week.