Can You Remove a Cosigner from a Car Loan?

It’s not always easy to get approved for an auto loan, but with the right help, almost any driver in North Canton and Canton can advance on their dreams of getting the vehicle that’s right for them. Adding a cosigner is often the smartest way to take the next steps, but it’s always prudent to understand your options. Can you remove a cosigner from your car loan? You might have to jump through a few hoops, but the answer is typically yes! Restrictions and options may vary, but most places offer you the means of adjusting your loan. Find out how to remove a cosigner from a car loan with Serra Mazda!

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

When you add a cosigner to an auto loan, it’s one of the easiest ways to shore up your bad credit auto loan application and make yourself look like a smarter investment, whether your choice is to buy or lease. Here’s why:

• If your credit is low, adding a second name to the application proves that someone else trusts you to pay the loan back.
• This is a protection for the lender because the partner is expected to step in and make payments if you fall behind.
• There’s also a downside: if you fail to make payments on your auto loan, the cosigner will have a negative mark on their record as well!

How to Remove a Cosigner From an Auto Loan

Removing a cosigner from an auto loan is almost always possible. You’ll want to discuss these options with your lender:

• Refinancing your loan. When we say “refinancing,” that just means working out new loan terms. If you’re able to refinance by yourself, your cosigner’s name will be removed and you could even benefit from a better interest rate. Try this option if your credit has gone up recently.
• Cosigner release. If there’s a cosigner release option in the fine print of your contract, some contracts will let you remove the cosigner’s name without a refinance.
• Sell the car and pay off your loan. If all else fails, you might decide to sell the car and pay off the loan in full! This is only a good option if you’re not underwater on your car loan. Doing this will immediately remove both you and your cosigner’s obligation.

Get More Car Buying Tips From Serra Mazda!

If you’re looking for more car buying tips from the team at Serra Mazda, we’d be more than happy to help you make a better time of your car owning journey. Or, you can contact us today to get in touch with someone from our team who can help you. We’ll even help you get pre-approved!