Can You Remove a Cosigner from a Car Loan?

Congratulations! You found a new vehicle and you’re ready to buy one. Getting approved for an auto loan isn’t always easy. However, most Philadelphia or Sewell drivers can find a way to move forward with an auto purchase. One way to do this comes from adding a cosigner to the loan. But you’ll need to understand your options.

Can you remove a cosigner from a car loan? Pay close attention to the regulations and paperwork of the loan. But the answer is usually yes! Restrictions and options vary from lender to lender. Most lenders offer ways for you to adjust your loan or contract after you purchase your vehicle. Our guide from BMW of Turnersville helps you find out how to remove a cosigner from a car loan.

What’s the Purpose of a Cosigner on a Loan?

Adding a cosigner can shore up your auto loan application if you have bad credit. It also makes your loan look like a smarter investment for the lender if you’re buying or leasing, whether you choose a new or pre-owned vehicle. Here’s why:

• If your credit score is low due to missed payments or a high debt-to-income ratio, adding a second name to the loan proves that someone else trusts you to pay back the loan.
• A cosigner creates a protective buffer for the lender because the partner is supposed to step in and make payments in the event that you fall behind. Someone else’s better credit can benefit you.
• One thing to be careful of is that the process also creates a new financial risk for your partner. If you fail to pay back your loan or end up missing payments, it will leave a negative mark on their record and not just yours. Be careful when adding a cosigner to a loan.

Even if you’re always on time, you or your partner might still wonder how to remove a cosigner from a car loan. After all, the amount of debt in their name could prevent them from taking out another loan or moving forward on a project in the future.

How to Remove a Cosigner From a Car Loan

Can a cosigner be removed from a car loan? Lenders almost always have a way to do this. The first step is to contact your lender by phone and talk to a customer service specialist. That professional can answer all of your questions.

Discuss the following options with your lender when removing a cosigner from an auto loan:

• Refinancing Your Loan – Refinancing means you work out new loan terms with the same lender or a new auto loan company. In the event you can refinance your auto loan by yourself, your cosigner’s name won’t have to be on the loan. You could even secure a better interest rate because you’ve been on time with your auto loan to this point. Try this option if your credit has gone up since you initially took out the loan, which is a distinct possibility if you make payments on time.
• Cosigner Release – Go over the fine print of your loan contract. See if there’s a cosigner release option! If you’ve made enough payments on time, some contracts will let you remove the cosigner’s name and eliminate their risk as soon as you can. Remember, each lender is different.
• Sell the Car and Pay Off Your Loan – If all else fails, you might decide to sell the car and pay off the loan in full! Although this is only a good option if you’re not currently underwater on your car loan, doing so will immediately remove your cosigner’s (and your own) obligation. You might need your cosigner’s permission to sell the vehicle first.

Test Drive Your Next New Vehicle at BMW of Turnersville!

Now you know if you can remove a cosigner from a car loan near Williamstown. Ready to find your dream car? Contact us or call (856) 290-8178 to schedule a test drive in Turnersville. We’re happy to help in any way we can!

Look over our new vehicle specials to see if you can save some money on your purchase. We think you’ll be impressed with everything we have on our lot!