How Remove a Cosigner from your Car Loan?
When you needed a car loan, you asked your friend or family member to be the cosigner. The lender made it clear that there should be a third-party with a good credit score to mitigate the risk of giving you credit.
The reason was that you didn’t have a stable income or your credit score wasn’t up to their expectations. There comes a time when you no longer need a cosigner for the auto loan, as you have a steady job with an excellent salary. Another situation is where the cosigner contacts you, asking you to remove their name from your credit.
Here are three ways you can remove a cosigner from your car loan:
Repay the loan
A simple way to remove the cosigner from your car loan is to repay the credit as soon as possible. One strategy you can use it to sell the automobile and use this money to make the monthly payments. If you are lucky, the value of the vehicle will be equal to the remainder of your car loan.
Find out if there is an option of cosigner release
Several lenders in Canada have the option where you can remove the cosigner from the auto loan by releasing them from the contract. However, you need to meet their requirements to be eligible for this course of action. For example, if you make the payments on time for several months, there is a high chance you can ask for cosigner release. Also, if you have no idea whether your lender has this option, get in touch with them or go through the loan documents.
Refinance your auto loan
Another way to get your cosigner out of the car loan is to refinance your credit. By taking a new auto loan in your name, you will be responsible for making the payments on time. However, don’t take any refinance option, without doing adequate research. Make a list of lenders who are willing to give you a new line of credit and compare their rates.
These are the three ways you can remove a cosigner from your car loan!