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How to remove a cosigner on a car loan?
I cosigned a car loan for my brother over a year ago, but now I want out. How do I get my name off the loan agreement?
Jim Donaher · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“When you cosign a
car loan
, you assume responsibility for making the payments if the primary borrower has trouble making paying down their debt. Borrowers who have little credit history, or who have had credit problems in the past, may be asked to find a cosigner to bolster their application so the loan can be approved. If you reconsider your decision to cosign a loan, getting your name removed can be cumbersome. There are three main ways to get this done:
- Have the primary borrower obtain a cosigner release, which will remove your name from the loan. This is relatively rare, but it’s worth pulling out your loan documentation to see if it’s possible. Some minimum number of on-time payments is usually needed to qualify for this option.
- Have the primary borrower refinance the loan in their name alone. This is most feasible if the loan has been open for a while and the payments have been consistently made on time, or if the primary borrower has had a significant increase in income.
- Sell the car and pay off the loan. The newer the vehicle, the less likely it is that a private sale will cover the full amount owed. You would still be on the hook for whatever is left. “
View full answer
- Gregory R.
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