If you do, start working on meeting the conditions and follow the process for the cosigner to be removed from the loan as soon as you become eligible. You can always ask. Lenders will usually be reluctant to remove a cosigner from a loan because doing so makes it harder for them to collect if something goes wrong. Once the cosigner is no longer on the loan, the lender would only be able to pursue a claim against the primary borrower -- and the lender has little reason to limit their options for collecting on the debt.
But, if the primary borrower has made all payments on time, has an improved credit score and a good income, and has been a good customer, the lender may be willing to work with you. Once the primary borrower has this new loan, the money from it can be used to pay back the existing loan with the cosigner. Of course, refinancing is possible only in circumstances where the primary borrower can actually qualify for a new loan on his own. Primary borrowers should focus on improving their credit so they can try to qualify for a loan without a cosigner.
The primary borrower should look for a refinance loan with the lowest personal loan interest rate possible, and should make sure payments on the new loan are affordable. If you're thinking of refinancing your personal loan, you'll need to decide which lender to work with. Check out our list of best personal loan lenders for some of the top lenders for a variety of credit scores.
If the cosigner signed for a loan with a tangible asset -- such as a car loan or a mortgage loan -- selling the car or the home to pay off the loan is one solution. This is often undesirable, but may be the only choice if the cosigner absolutely must have their name off the loan.
This is especially true if cosigner release is a possibility. The cosigner could pay the minimums for the required time to get released from the loan. Getting a cosigner released from a loan is a big hassle and not always possible. Our favorites offer quick approval and rock-bottom interest rates. Check out our list to find the best loan for you.
If you had enough extra cash lying around to pay off the loan, chances are you would have already done it by now. There is one way to raise enough money to pay off the loan, though: by selling the car. If the other person decides to skip town and stop paying, then you could be on the hook for the payments.
If the other person is also listed on the title, they can take the car away from you and there may be little you can do about it. Luckily, there might be an easy out for you in this case. If you have something in writing, then you might have some legal standing if you need to go to court. Having a written exit plan is sound advice for anyone, and good to remember in the future. But for now, the best way for how to remove a cosigner from a car loan is probably by applying for cosigner release.
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I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Personal Finance Loan Basics. Table of Contents Expand. Improve the Main Borrower's Credit Rating. Pay off the Loan Faster. Close the Account. The Bottom Line. Key Takeaways Your best option to get your name off a large cosigned loan is to have the person who's using the money refinance the loan without your name on the new loan. Another option is to help the borrower improve their credit history. You can ask the person using the money to make extra payments to pay off the loan faster.
If you are a joint account holder on a credit card or line of credit, the best way to get out is to pay off the debt or transfer the balance and then close the account. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation.
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