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.
Once you've separated, you can send a notification to your financial institution informing them that you'll no longer be using the credit extended and that you no longer wish to be solidarily liable for your ex's future use of the line of credit.
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.
You're generally able to remove yourself as an authorized user by calling the credit card issuer and requesting the change.
“However, if you have a credit account that's two years old and an authorized user account that's eight years old, removing the authorized user account could hurt your credit score.”
Schulz also notes that when primary cardholders remove an authorized user on their card, the primary cardholder's credit history will no longer influence the authorized user's credit history.
Refinance or Consolidate
"If the primary account holder's credit score or income has gone up, they may be able to refinance the loan in their name only. You'll be off the hook, and they may secure more favorable loan terms," says Tayne.
If you are a guarantor and no longer wish to be, you must obtain the consent or agreement from the landlord before you will be released from your liabilities, which, if the rent is in arrears, the landlord is unlikely to agree to.
You can often remove a cosigner at any point during the loan period. Your loan paperwork might dictate specific terms, though. For example, some lenders require 24 months of on-time payments from the primary borrower before they'll consider releasing the cosigner.
If you haven't used your line of credit, you can close it whenever you want. If you have used your line of credit, you will have to pay it off in full before you can close it.
Your account may be suspended. The lender may also be able to take the money you owe directly from your checking account or any other account you have at that bank or credit union. This is called “setoff.”
Key takeaways. Closing a credit card can negatively impact your credit score by reducing your average age of accounts and increasing your credit utilization ratio. Cardholders with shorter credit histories and smaller lines of credit are more likely to have a large credit score drop from closing a credit card account.
After you're approved and you accept the line of credit, it generally appears on your credit reports as a new account. If you never use your available credit, or only use a small percentage of the total amount available, it may lower your credit utilization rate and improve your credit scores.
Potential downsides include high interest rates, late payment fees, and the potential to spend more than you can afford to repay.
Convenience and ease of use: You can access funds from a line of credit through ATM cash withdrawals, cheques, or online transfers. No annual fee: Most lines of credit don't have an annual fee, and the only additional cost is interest on the credit balance you utilize.
Again, there is no set formula for when you can remove a guarantor from your home loan - this will change between lenders - but a guarantor can generally be released once your loan is less than 90 per cent LVR (or 80 per cent if you want to avoid paying lender's mortgage insurance) and you've made all repayments on ...
Contact the lender: Write a formal request to the lender, explaining your wish to withdraw as a guarantor. Attach necessary documents like proof of identity and relationship with the borrower.
In short, the Ankar Principle provides that a guarantor will be discharged from their entire liability under a guarantee if: the guarantor's rights under the contract are altered without the consent of the guarantor; and. the alteration is substantial or prejudicial to the guarantor.
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.
The only way you can remove your name from such a loan is get the bank another person who is more substantial than you to cosign the loan on condition that your name is off. The bank should also agree to accept the new person.
You can't remove yourself from a loan contract just because the other borrower isn't holding up their end. Your responsibility doesn't end until the contract is fulfilled and the loan is repaid. Ownership and liability are two separate things.
On the other hand, if the account in question has had frequent late payments or carries a high credit utilization, removing an authorized user (or removing yourself as an authorized user) could give a boost to your credit scores.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
If you want to be removed from the account, you'll have to call the credit card provider and be prepared to negotiate. If the other account holder would qualify for the card on their own, the credit card company may approve your request. If not, your only option is to pay off any outstanding debt and close the account.