Can You Remove a Cosigner from a Car Loan?

Adding a cosigner to an auto loan is a good way for East Greenwich-area drivers with poor credit or no credit to get behind the wheel of the vehicle they need. If you keep up to date with your payment schedule, your credit score will improve and you may want to consider removing the cosigner from the loan. Can you remove a cosigner from a car loan? In most cases you can, however it depends on the restrictions and options built into your loan. Find out how to remove a cosigner from a car loan in this guide from the finance team at BMW of Warwick. If you’d like to further explore your options, please feel free to contact us.

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

Whether you decide to buy or lease, adding a cosigner can make it easier for you to be approved. If your credit is low due to missed payments or a high debt-to-income ratio, adding a second name to the agreement proves that someone else trusts you to pay back the loan. However, if you fail to pay back your loan or end up missing payments, it will leave a negative mark on your cosigner’s record.

Eventually either you or your partner may reach the point where you’d like to know how to remove a cosigner from a car loan. After all, the amount of debt in the cosigner’s name could prevent them from taking out another loan or moving forward on another financial venture.

How to Remove a Cosigner From an Auto Loan

Removing a cosigner from an auto loan is generally an option with most lenders. If you’ve tried contacting your local Providence-area lender, but are still not sure how to remove a cosigner from an auto loan, consider the following options:

• Refinancing Your Loan – Refinancing is a way to get a better interest rate and lower monthly payments. If you are able to refinance by yourself, your cosigner’s name will be removed from the loan. This is a good option if your credit score has gone up since you initially took out the loan.
• Cosigner Release – If you’ve made enough on-time payments, some contracts will allow you to remove the cosigner’s name. Review your contract to see if there’s a cosigner release clause included.
• Sell the Car and Pay Off Your Loan – If you are unable to remove the cosigner from the loan or if you can’t keep up with your monthly payments, you might decide to sell the car and pay off the loan in full. This is only a good option if you’re not under water on your car loan (i.e., owing more on the car than it is currently valued at). Selling the vehicle and closing out your loan will immediately remove your cosigner’s (and your own) obligation.

Get More Car Buying Tips From BMW of Warwick!

Can you remove a cosigner from a car loan in Cranston? As we have explained above, removing a cosigner from an auto loan is an option included in most agreements. If you’d like to discuss your options or if you’d like to learn about the BMW Select Financing available at BMW of Warwick, give us a call at (401) 244-4796.