Hello, Unless the lender is willing to release you from the loan or the other party refinances in their name only, you cannot remove yourself from a loan. It is a contract that the lender doesn't have to let you out of until it is paid off in one way or the other.
You may have to go to court and file a lawsuit to seek a court order for the co-signer's removal. You'll need to provide evidence that the co-signer has not made any payments and that you have been solely responsible for the car payments.
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.
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.
But if your circumstances change over time or your credit score improves and you would like to remove the co-signer from your loan, there are three primary options. You can refinance, get a co-signer release or pay off the loan.
Unfortunately, since you have no legal rights to the vehicle, the primary borrower has to take the initiative to remove someone's name from the contract. 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.
To release a cosigner from the car title, you'll essentially do a title transfer from both owners to only your name. This step requires a few documents, including the original title signed by the 'sellers,' odometer verification, a valid government-issued ID, and proof of insurance.
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.
Co-signing means you are responsible for covering payments if the main borrower cannot, but you do not have any legal rights to the car. Co-owning means both parties have equal ownership and financial responsibility for the car.
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.
He can not take it away from you. But, if you are both in the title & registration card, you are both co-owners too. If you are in the title alone, it is your car.
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.
If things go poorly, all three could suffer. Can a cosigner repossess a car? It's important to know that taking possession of the car if the primary borrower defaults, or “taking matters into your own hands,” is not a legitimate substitute for legal action.
There are a few ways you can go about removing a cosigner from an auto loan: Refinancing Your Loan: You can refinance your car loan by working out a new agreement with your lender without your old cosigner added to it. This is a viable option if your credit score has gone up since you originally financed your car.
When the title states “and/or” or “or” in the name field, only one person needs to consent to remove a name. If it only contains the word “and,” both parties need to agree to remove any name from the title. Therefore, you'll need to get consent from the co owner.
To remove a cosigner from a car loan and title, you typically need to refinance the loan solely in your name. This involves applying for a new loan based on your creditworthiness and income, which can be challenging if your financial situation has changed since the original loan was taken out.
Usually, when you cosign a car loan, you agree to be responsible for the debt if the primary debtor doesn't make payments or otherwise defaults on the loan. If the primary debtor defaults on the loan, then the creditor has the right to repossess the car and sell it.
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.
Although liable for payments if you default, the cosigner doesn't share vehicle ownership and won't be on the car title. They also generally don't make the regular monthly payments. Co-borrower: A co-borrower shares financial responsibility and ownership of the car from day one.
Repossession is really bad news for both the borrower and the cosigner. Not only will the borrower lose their mode of transportation, but one of you will likely have to pay the remaining balance, and credit scores belonging to both of you will take a hit in the process.
Contact the Lender to Discuss Your Options
Your best option is to work with the other person to pay off any existing balance and close the account. The person would then need to apply for a new account on their own.