How do I remove a cosigner from a loan?

Asked by: Bernhard O'Kon PhD  |  Last update: February 14, 2024
Score: 4.2/5 (8 votes)

Here are the four main ways to remove a cosigner:
  1. Release the Cosigner. Some banks and lending companies offer cosigner releases. ...
  2. Pay Off the Loan. If you have the money to pay off your loan in full, you might consider this option to remove your cosigner. ...
  3. Refinance Your Car. ...
  4. Sell the Car.

How do I legally remove a cosigner?

To get a co-signer release you will first need to contact your lender. After contacting them you can request the release — if the lender offers it. This is just paperwork that removes the co-signer from the loan and places you, the primary borrower, as the sole borrower on the loan.

Can a cosigner be removed from a personal loan?

It is possible to remove a cosigner without refinancing. However, in most cases, the lender will likely require the borrower to refinance the loan anyway. This is because it's unlikely that the borrower would qualify for the same rate and terms without the cosigner.

How do I remove a cosigner without refinancing?

The main ways to remove a name from a mortgage without having to refinance include:
  1. A loan assumption.
  2. A loan modification.
  3. A cosigner release.
  4. A quitclaim deed.
  5. Sell your home.
  6. Pay off your home.

Is there a way to get off a loan as a cosigner?

Get a loan release

Some lenders have a release option for co-signers, according to the Consumer Financial Protection Bureau. A release can be obtained after a certain number of on-time payments and a credit check of the original borrower to determine whether they are now creditworthy.

How To Get Approved For A Personal Loan

34 related questions found

Will removing myself as a cosigner hurt my credit?

Being removed as a cosigner from a loan could potentially hurt your credit scores. How much your scores are impacted depends on the details of your credit profile.

Does coming off a loan as a cosigner hurt your credit?

Removing yourself as a cosigner of a loan will also remove all the data related to that loan. So, if the primary cardholder made consistent on-time payments, removing yourself could actually lower your credit score.

How hard is it to remove a cosigner?

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.

Can you remove cosigner on title?

You may be wondering if you can go about removing a cosigner from a car loan, and the answer is yes, you can. Often, you can simply contact your lender to get a cosigner released, but sometimes it can be more complicated.

Can a cosigner take you to court?

If you're the primary borrower on a debt, your cosigner can take you to court for: Recovery of money paid: they can sue you to recover the money they've paid towards the loan. Fraud: they can sue you if you signed their name to the loan without their permission.

How can co signers protect themselves?

How to protect yourself when co-signing a car loan
  1. Serve as a co-signer only for close friends or relatives.
  2. Keep copies of all the loan documents.
  3. Create a contract.
  4. Track monthly payments.
  5. Ensure you can afford payments.

How soon can you remove a cosigner from a mortgage?

The lender may require two years of on-time payments, for example. If that's the case, after the 24th consecutive month of payments, there'd be an opportunity to get the cosigner off the loan. Review your loan terms carefully to find out if you have cosigner release as an option.

Can you sue someone you cosigned for?

Yes, you can sue the person you co-signed for if they don't make the payments they promised to make. You may be able to get a judgment against them in court, but it could be hard to collect on that money, since they didn't pay the debt in the first place.

How do I request a cosigner release?

In general, to qualify for co-signer release, borrowers must prove they have the ability to pay off the loan on their own, in addition to having no late payments for a set period of time, says Kaplan. The lender will also review the borrower's full credit history and assess current income relative to the loan payments.

Who gets the credit on a cosigned loan?

Having a co-signer on the loan will help the primary borrower build their credit score (as long as they continue to make on-time payments). It could also help the co-signer build their credit score and credit history, if the primary borrower makes on-time payments throughout the course of the loan.

What happens to cosigner if I don't pay?

The lender may take legal action against you, pursue you through debt collection agencies, or sell the debt to a “debt buyer” to try to collect the money that is owed on the loan if the borrower does not pay or defaults on his or her repayment obligations.

How do I take my name off a car as a cosigner?

If this is a manageable option, you must contact the lender and pay off the current balance along with the payoff amount. Once the loan is paid off in full, the responsibilities of both the primary borrower and the co-signer will end.

Does a co-signer go on title?

A co-signer applies for the home loan right along with you. However, they are not on the title of the home. The co-signers name is only on the loan, meaning that while they are financially responsible for paying back the mortgage, they do not have ownership of the property.

What is a cosigner release?

Releasing your co-signer means they are no longer responsible for the repayment of your loans. Some private loans allow you to remove the co-signer from your student loan after you've made a certain number of on-time payments.

How long does a cosigner last?

Normally, a cosigner will have to stay on the mortgage for a minimum of one year. From my experience, normally a cosigner will stay on a mortgage for several years. When the borrower is ready to have the cosigner removed, they contact the lender to then re-qualify without the cosigner.

Should I release my cosigner?

If you're considering cosigner release, keep in mind that there are benefits for you as the borrower, too. This includes: Showing you can financially handle the loan on your own. Potentially taking financial strain out of the relationship between you and your cosigner.

How long does a co signer stay on a lease?

Cosigning on a lease is the same thing as signing a lease—typically, you're on it until the lease expires. Can you afford the rent? Cosigning is a promise to pay the rent if the lessee does not.

Will my credit score go up if I cosign?

Yes, being a cosigner on a car loan will help you build your credit history. The primary loan holder and cosigner share equal responsibility for the debt, and the loan will appear on both your credit report and hers.

Does Cosigning show up on your credit report?

Acting as a co-signer can have serious financial consequences. First, co-signers assume legal responsibility for a debt. So, if the primary borrower is unable to pay as agreed, the co-signer may have to pay the full amount of what's owed. Second, a co-signed loan will appear on the co-signer's credit reports.

Who owns the car if there is a co-signer?

Although liable for payments if you default, the cosigner doesn't share vehicle ownership. They also generally don't make regular monthly payments. Co-borrower: Also known as a co-applicant, the co-borrower shares financial responsibility and ownership of the car from day one.