Maybe you’re going through a divorce and the last thing you want to deal with is what to do with the shared car. Or you thought signing a loan with your college roommate was a great idea, but now you’ve graduated and you’re moving to different states. Or maybe your dad cosigned an auto loan while you were in college, but you’ve got a real job now and it’s time to remove him from the loan. Removing a co-signer from a car loan can be a contentious topic, but it doesn’t have to be difficult.
Whatever the situation, if you find yourself wondering how to get your name off a joint car loan or remove a co-signer from a car loan, you’re not without recourse. You’ll find the best options below, including the important distinction between a co-signer and a co-borrower.
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Can you remove your name from a joint car loan?
You cannot simply remove your name from a joint car loan, but there are options. For example, the co-borrower can refinance the loan as a solo borrower. If you were a co-signer for someone who couldn’t apply for the loan on their own, if their financial situation has improved, they may be able to remove you as a co-signer.
You also have the option to agree with the co-signer who will pay the loan, and assuming they abide by that agreement, you may not need to try to remove your name from a joint car loan.
Reasons to get off a joint car loan
The most common reasons to get off a joint car loan center on relationship changes: divorce, separation, or a move. In these cases, continuing to share a car loan can make for awkward or inconvenient situations. Each borrower may prefer to get their own auto loan.
You might also want to get off a joint car loan if the joint borrower fails to hold up their end of the bargain. If, for example, the co-borrower is responsible for payments every other month and they pay late or don’t pay at all, it can hurt your credit score. In that case, you’ll need to agree to be responsible for payments or consider getting off the loan.
What to know about removing someone from a car loan
If you and a joint borrower want to remove one of you from a car loan, there are a few considerations to understand how to do it.
Consider whether they’re a cosigner
If they are co-signer and your financial situation has changed, you may be able to remove them. A co-signer is usually required if you can’t prove sufficient income or financial resources to secure a loan without a co-signer. The co-signer can be a friend, relative, or spouse whose income is used to guarantee loan repayment. A co-signer does not own the car, they are only responsible for loan payment if you fail to pay.
If you can demonstrate financial self-sufficiency, you can ask the lender to remove the co-signer. If they don’t agree, you have options that are discussed below.
Consider whether they’re a co-borrower
If they are co-borrower, you will not be able to remove them from the loan without refinancing it. If you have sufficient proof of income or savings to qualify for an auto loan on your own, you can remove the co-borrower with an auto loan refinancing.
Remember to retitle the vehicle
If the vehicle was held by a co-borrower to refinance the loan, you’ll also need to retitle the car. A co-borrower is responsible for both the loan and the car. If you remove the co-borrower from the auto loan through refinancing, you’ll want to be sure the title is in your name. Likewise, if you are removed from a co-borrower’s loan, you don’t want to be held responsible for the vehicle.
How to remove a co-signer from a car loan
If you want to remove a co-signer from a car loan, you have several options. The pros and cons of each are discussed below.
Obtain a co-signer release form
A co-signer release form for a car can be found on the lender’s website and is the simplest way to remove a co-signer from a car loan. You may be able to submit a paper form in person, through the mail, or online. Along with the co-signer release form, you’ll usually be asked for pay stubs or other proof of income for your co-signer release request to be successful. The main criteria lenders look for is a history of years of online payments on the loan.
What are the pros of a co-signer release form to remove a co-signer from a car loan? It’s the fastest and easiest option. The con is that if you don’t have sufficient proof of income, your request may be denied.
Pay off the loan
If you can pay off the loan in full, that will remove a co-signer from a car loan and fulfill the auto loan agreement. Keep in mind that some auto loans have penalties for paying the loan off early. You don’t want to get hit with expensive fees!
The pros of this option? If you can pay off the loan in full without penalties, you will save on interest and own the vehicle outright. The main con is that this option may not be realistic for everyone.
Sell or trade in the vehicle
If you sell or trade in the vehicle and pay off the auto loan, that will remove a co-signer from a car loan. If you trade in the vehicle and the new vehicle’s value is more than the amount paid down (the equity on the current loan), you’ll need to apply for another loan or have savings to pay the difference.
Here’s an example of how that could work: Suppose your auto loan was for $25,000 for the original vehicle, and the trade-in value of the vehicle is $23,000. If you’ve paid $15,000 over three years on the auto loan, and trade it for a vehicle with a $13,000 value, you should be able to pay for the new vehicle in full.
The pros of this option? You may be able to purchase a lower-value vehicle in full and no longer carry the loan. The cons? Selling or trading in a vehicle can be a hassle. If you’re happy with your current vehicle, you might not want to sell or trade it in.
Refinance the loan
If getting a co-signer release form for a car, paying off the loan, or trading in the vehicle isn’t possible, then the best option is to refinance the loan. To remove a co-signer from a car loan with a refinance, you can shop around to different lenders to get more favorable terms.
If your credit score has improved, this has the added benefit that you might get a lower interest rate. With refinancing you can also extend the life of the loan, potentially decreasing monthly payments, but you’ll need to be approved for the loan refinance.
Final thoughts on how to get your name off a joint car loan
When you’re faced with co-signer car loan removal, or wondering how to remove a co-signer from a car loan, the simplest option is the co-signer release form for the car. If you are a co-borrower, you’ll need to consider refinancing, selling, or trading in the vehicle. Whatever the situation, there are options to get your name off of a joint car loan, but you’ll need to come up with a plan with your co-borrower.
How do you get your name off of someone else’s car loan?
To get your name off of someone’s car loan you have the option to request a co-signer release. Selling or trading in the vehicle is another way to remove a co-signer from a car loan. If these aren’t options, you can ask them to refinance the loan without you.
Can you sue to get your name off a loan?
You cannot sue to get your name off a loan you signed. But you can discuss options with the co-borrower and a mediator to reach a solution that works for both of you.
Can a primary borrower be removed from a car loan?
No, a primary borrower cannot be removed from a car loan unless the car is sold and the loan is repaid or refinanced.