Can You Remove a Cosigner from a Car Loan?

In some circumstances, lenders require a cosigner before approving you for an auto loan. A cosigner can make the financing process quicker and easier, because you won’t need to show the lender that you’re capable of keeping up with the payments on your own. But if your situation changes down the line, can you remove a cosigner from a car loan? 

The answer is yes! Depending on your particular loan, removing a cosigner from auto loan may be as simple as contacting your lender. Below, Schaumburg drivers can find out how to remove a cosigner from a car loan, and contact our finance center for more about negotiating the lease and financing process!

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

A cosigner makes it easier to get approval for your car loan. Streamwood drivers with bad or no credit or a precarious financial situation may choose to find a cosigner. Lenders need to feel that they can trust a borrower to pay back the loan on time, and a loan with a cosigner assures the lender that if the borrower can’t make payments, the cosigner will. Just as much as the borrower, the cosigner also must be sure that the loan payments would fit their budget.

How to Remove a Cosigner from an Auto Loan

If you’re confident you can take care of those Chevy Equinox payments by yourself, you have a couple ways of removing a cosigner from your loan agreement:

• Refinancing — In a life event such as divorce, you may be able to refinance your loan to remove an ex-spouse. Divorce decrees don’t automatically release the signer and cosigner from their joint contract. If the signer fails to make payments, the credit scores of both spouses will suffer. Refinancing in your name only will remove the cosigner, making the loan your sole responsibility.
• Cosigner Release — Some auto loans have a cosigner release option to release a cosigner from further obligations after a certain number of full, on-time payments by the primary borrower. Contact the lender and check your loan documentation to learn whether your loan includes this option.
• Sell and Pay Off the Loan — As long as your name is on the car title, you can sell the car to a new owner and use the money to pay off the loan, freeing both you and the cosigner from any further payment obligations.

Discover Your Auto Financing Options with Biggers Chevrolet 

Removing a cosigner from auto loan is possible, but can be difficult to navigate depending on your loan agreement, financial situation, and cosigner. For more car buying tips on the options we discussed above, contact our finance team to speak with a financing expert. We’ll look closely with you at the lease, finance, and insurance options for drivers near Bartlett.