Cosigners can't take possession of the vehicle they cosign for or remove the primary borrower from the loan since their name isn't on the vehicle's title.
Unlike co-borrowers, who are on the title or have some claim to the property or funds, co-signers have no title or ownership of the property the funds are used for. For example, a co-signer for a vehicle has no legal right to the financed vehicle.
Fortunately, you can have your name removed, but you will have to take the appropriate steps depending on the cosigned loan type. Basically, you have two options: You can enable the main borrower to assume total control of the debt or you can get rid of the debt entirely.
The lender can seek a deficiency judgment against you even though you didn't own the car and the person you cosigned for was supposed to make the payments. But if a car you cosigned for is repossessed, you still have rights when it comes to the sale and collection of the deficiency.
If you cosign a debt and the borrower doesn't pay, in most every case you will be responsible for the entire debt. And, the lender does not have to try to collect from the borrower.
Request release from a co-signed loan
Co-signers can make a written request to the lender to be released from a loan. In certain cases, like some student loans, there may be a provision that allows a co-signer to take their name off a loan.
A co-signer doesn't need to stay on the loan for the life of it, either. After making the required principal and interest payments, you can apply to release them and manage repayment on your own.
Yes, you can sue the person you co-signed for if they don't make the payments they promised to make.
Since you and your co-borrower own the car equally, you're both equally on the hook for the vehicle loan. If you want to sell the car by yourself, you may not be able to – you're likely to need your co-borrower to complete the sale. Both of your names are on the title, which can make selling the vehicle complicated.
In general, if someone takes or controls your property without your permission, it could potentially be considered theft. Here if you contacted the police department they would investigate whether it is theft and charge him with a crime if they believe one has occurred.
Cosigning a loan doesn't give you any title, ownership, or other rights to the property the loan is paying for. Your only role is to repay the loan if the main borrower falls behind on the payments or defaults.
The cosigner is legally responsible for the debt if the primary borrower can't make payments. Any late or missed payments can negatively impact both parties' credit scores. Furthermore, the cosigner doesn't have any ownership of the vehicle.
You can remove the co-signer by refinancing your auto loan, receiving a co-signer release or paying off the loan. Before removing the co-signer, ensure your credit score is high enough to receive the same or comparable rate if you refinance.
Keep in mind that a cosigner can't take possession of a car they've cosigned for. A cosigner doesn't have any legal rights to the vehicle, so they can't take a car from its rightful owner, the primary borrower.
Quick insights. A co-signer may want to be removed from an auto loan for several reasons. Co-signers cannot remove themselves from a loan or be removed by the primary borrower. A co-signer's obligation is eliminated when the loan is paid off or refinanced without their involvement.
While you don't necessarily have the same rights to the vehicle as the primary borrower, you – as the co-signer – are equally responsible for ensuring the loan is paid back. If the primary borrower doesn't make their monthly loan payment, you will be asked to make the payment.
A co-signer or co-borrower can request a release from a car loan, refinance the loan, pay off the loan or sell the vehicle to remove themselves from the loan agreement. It is important to communicate with the other borrower and come to an agreement on how to handle the loan before taking any action.
If the borrower does not repay the loan, you may be forced to repay the whole amount of the loan, plus interest and any late fees that have accrued. With most cosigned loans, the lender is not required to pursue the main borrower first, but can request payment from the cosigner any time there is a missed payment.
If you're wondering “how to remove a cosigner from a car loan,” it is possible to do so. Contact your lender to discuss options. They will only agree if your credit history has improved to the point where you're not a risk to them.
If a person co-signs on a loan or a lease, they are guaranteeing to the bank that they will be responsible for payments no matter what. If one or both of the parties fails to make payments, the bank can repossess, evict, or sue.
But most states allow cosigners to take primary borrowers to court in the following situations: Cross claims: If you default on or fail to repay the loan, the lender could sue the cosigner for the money owed. The cosigner may then be able to sue you for the money that the lender is trying to recover.
Each lender has its own criteria and process for removing cosigners, and some don't even allow it. So the best place to start is to contact your lender to find out your options. They may include: Co-signer release: An agreement to release the cosigner's liability after a certain number of payments are made.