Can You Remove a Cosigner from a Car Loan?

If you’re having difficulty securing a loan for your car in the Smyrna area, having someone cosign the loan can make the process much easier. Cosigning is particularly beneficial if you have a low credit score, you’re between jobs, or you haven’t secured a loan before. However, at some point after the fact, you may be wondering, “Can you remove a cosigner from a car loan?” if you find you’re in a position where you no longer need the cosigner. The short answer is yes! Removing a cosigner from a car loan is absolutely possible, but there are a few different routes you can take to achieve it. The finance team at Marietta Toyota has outlined the purpose of a cosigner along with common ways to release them from a car loan below, so read on!

Reasons for Cosigning on a Loan

Cosigning is designed to make the process of securing a loan easier for the borrower. There are plenty of reasons why someone would want a cosigner, whether their credit score is holding them back or their income isn’t high enough to qualify for a loan. A cosigner is kind of like insurance for the lender, as their presence ensures that the loan will still be repaid even if the borrower can’t pay off everything on their own. Before getting someone to cosign on a loan, you should make sure that they can fit the payments into their monthly budget without too much trouble.

Removing a Cosigner from a Car Loan

If you’ve decided that you want to remove the cosigner from your Atlanta car loan, there are three major routes you can take:

• Cosigner release: Some car loans come with a cosigner release option, which is basically a clause that releases the cosigner from their obligations after the primary borrower has made a certain number of on-time, in-full payments. You can easily find out if your loan has a cosigner release option by contacting your lender. 
• Sell the car: If you sell your car to someone else and use the money you get to pay off the rest of the loan in full, you’ll release both yourself and the cosigner from your payment obligations.
• Refinancing the loan: If you want to remove a cosigner from your car loan, you may be able to refinance the loan in your name so it becomes your responsibility alone. For example, if you’ve recently gone through a divorce and your ex-spouse is a cosigner on your loan, you could refinance the loan in your name only. Divorce doesn’t release the cosigner from the terms of the agreement, so don’t assume that they’ll be removed automatically.

Discover Financing and Much More with Marietta Toyota

If you have any questions about the cosigning process or want more information about financing, feel free to contact our dealership near Kennesaw anytime! And if you’re ready to start the financing process for yourself, you can apply for financing right from our website.