How to Remove a Cosigner From a Car Loan

Dustin Hawley | Feb 10, 2021

Regardless of whether your finances are flourishing or floundering, car loans are often hefty financial obligations. To reduce individual risk and qualify for loans with low-interest rates and better terms, many people choose to apply for car loans with co-signers, sharing the financial responsibility and putting them both on the hook for any consequences endured from defaulting on the loan.

remove cosigner from loan

Co-signers are additional loan signers that are appointed financial responsibility alongside the “main” borrower. If the principal borrower defaults on a loan payment, the co-signer is on the hook for making that payment, and their credit score might be affected by any negative reports in regards to the vehicle loan.

However, a situation may arise where you need to know how to remove a co-signer from a car loan, either due to financial hardship or any number of other reasons. Let’s examine how you can remove a co-signer from a car loan and dive into what the process entails.

Is It Possible To Remove A Cosigner From A Car Loan?

The simple answer to this question is yes, you absolutely can. However…

There are only a few ways you can remove a cosigner from your car loan, in part because the idea of getting a co-signer is to make it difficult for both parties to back out.

Keep in mind; people often bring in co-signers because they don't have enough credit or capital to either qualify for a loan themselves or if they aren't sure they'll be able to fulfill their monthly payment obligations. Regardless, banks and lending institutions like cosigners because it gives them more confidence that the loans they hand out will be paid off one way or another.

The bottom line is while it’s possible to remove a cosigner from your car loan, it can be a difficult and sometimes complicated process. We strongly advise investigating alternative options before attempting to remove a co-signer.

Why Would You Want To Remove A Co-Signer?

You might need to remove a co-signer from a car loan for several reasons. Some of the most common reasons include:

Domestic Fallout

Sometimes, life can suddenly change, and people who cosign on loans for cars, houses, and other expensive purchases will sometimes encounter the situation of a break up with their significant other. Divorces and other breakups can often be costly in many ways, and people don't want a loan hanging over their heads if they aren't planning to keep the purchased item in question.

For instance, let’s say a husband and wife choose to divorce, and the husband decides he’d like to keep the car. The wife might legitimately want her name removed from the loan to relieve herself of any financial responsibility moving forward if her former husband defaults on his payments.

Financial Strain

One of the co-signers on the loan may have simply fallen onto hard times financially in certain situations. Unfortunately, they may be unable to make regular payments on the loan and be seeking relief from the potential effects it could have on their credit score and additional financial fallout. 

Either way, the remaining co-signer might want to remove them from the loan to spare their own credit score and protect the credit score of their loan partner. Or they simply might want to remove the loan’s financial obligations for their partner. Either way, financial strain can be a prime contributor to the motivation behind removing a co-signer.

Credit Hits

As we touched on above, loans can significantly impact your credit score. You may wish to remove a cosigner from a car loan if their credit score is dropping dramatically and you don’t want your own credit score to be affected by their lack of payments.

Removing A Cosigner From A Car Loan

There are three main ways in which you can remove a cosigner from a typical car loan.

Check Your Contract and Contact Your Lender

First, do an in-depth investigation of your car loan contract. Affiliate yourself with the language and look closely at the details. You can also contact your lender to see if there is a "cosigner release" option. Certain loans have a few conditions that allow you to remove a cosigner's financial obligation from the loan, often under specific restrictions like:

  • A certain number of on-time payments have been made.
  • They are not the primary borrower (principal owner on the loan).
  • Their credit score has not dropped below a certain threshold. 

However, not all car loans have these cosigner release options, so be sure to double-check before contacting your lender and asking for something they may not have the option to provide. It might also be a good idea to check for this before signing any new car loan.

Refinance the Loan

One way of going about removing a co-signer from a car loan is refinancing your loan. Though it’s a bit of a roundabout way by refinancing the loan, it can effectively remove a co-signer in the event it becomes necessary.

This process involves taking out a new loan for the remaining loan balance, either through a separate loan from the same lender or by transferring the balance to a new loan from a new lender.

When you refinance the loan, the process always involves signing a new loan application. Suppose you are approved for refinancing the loan. In that case, you have the option only to state your name on the loan contract, effectively removing your co-signer from any legal or financial obligation.

It should be noted that when refinancing your car, you’ll need to be approved for the new loan in question for this method to even be in play. You may need a high credit score and a good payment history to qualify for this option.

Pay the Loan Off

Lastly, the most simple and straightforward way to remove a co-signer is to pay a car loan off in its entirety. This fulfills the terms of your loan obligation, and in the process, removes the cosigner from the financial commitments that it represents.


All in all, removing a co-signer from a car loan is a fairly involved process that you should consider under very specific circumstances, and only when absolutely necessary. Take the necessary time and perform the required research to decide if a co-signed loan is a good decision for you. If there’s any hesitation, you might be better off signing a loan individually, so you don’t have to jump through these hoops sometime in the future, or worse yet, end up with any buyer’s remorse!

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