What to know about switching co-signers on a car loan Part Of Financing a Car With a Co-Signer In this series Financing a Car With a Co-Signer Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make smarter financial decisions by offering interactive tools and financial calculators as well as publishing high-quality and impartial content. This allows you to conduct research and compare information at no cost to help you make sound financial decisions. Bankrate has partnerships with issuers including, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this website are provided by companies that pay us. This compensation may impact how and where products appear on this website, for example for instance, the order in which they may appear in the listing categories and other categories, unless prohibited by law. Our mortgage or home equity products, as well as other home lending products. This compensation, however, does have no impact on the content we publish or the reviews you read on this site. We do not cover the vast array of companies or financial offerings that could be accessible to you. SHARE: Tony Anderson/Getty Images
2 min read published September 12, 2022
Written by Mia Taylor Written by Contributing Writer Mia Taylor is a contributor to Bankrate and an award-winning journalist who has two decades of experience and worked as a staff reporter or contributor for some of the nation’s leading newspapers and websites including The Atlanta Journal-Constitution, the San Diego Union-Tribune, TheStreet, MSN and Credit.com. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping readers to control their finances with concise, well-studied information that breaks down complicated topics into bite-sized pieces. The Bankrate promises
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Therefore, this compensation may affect the way, location and in what order items appear within listing categories and categories, unless it is prohibited by law. We also offer loan products, such as mortgages and home equity and other home lending products. Other factors, like our own rules for our website and whether or not a product is offered in your region or within your personal credit score could also affect the way and place products are listed on this site. While we strive to provide the most diverse selection of products, Bankrate does not include information about each financial or credit product or service. Making a deal with a co-signer may seem like a good idea initially however in some instances it may not go as planned. It is possible that the relationship between primary borrower and the co-signer may change or the financial position of the co-signer might change and, consequently the co-signer might want to walk to walk away from the arrangement. It is possible to get out benefit from an loan but replacing one co-signer with another on the original loan is unlikely. The process is more involved and may require refinancing the loan and completing the co-signer release forms or paying the loan completely to end the co-signer’s role. It isn’t possible to simply swap your existing auto loan co-signer Most lenders won’t just swap a current co-signer with a new one on an existing vehicle loan as it requires them to essentially complete the approval process to approve an . Although it’s never hurt to inquire with the lender about this possibility, swapping one co-signer to one on an existing loan is not a standard procedure. The procedure typically is based on the terms and conditions of a loan and isn’t designed or intended to alter the parties who signed on to the loan. Refinancing could get rid of a co-signer for your vehicle loan and enable you to get a new one Yet another approach to eliminate a co-signer for an automobile loan is to simply . Also, create a new loan which settles the current loan’s balance and closes the loan. The new loan is able to be opened through the help of a new lender and can be done without the co-signer’s involvement. In certain cases it is possible to open it with the same lender but that isn’t always possible. In order to do this, however, you need to be able to qualify for an entirely new loan by yourself, which requires a good credit score and history of payment. If you have since originally buying the car refinancing, it could also provide an opportunity to obtain the most competitive interest rate or revised loan payment terms. Bankrate tip: If your credit rating is not up to par, you might consider finding someone you can feel at ease asking them to co-sign on a new loan. Removing the co-signer from your auto loan could be an option. While not all lenders offer this option, it is possible in certain cases to get rid of a co-signer completing a co-signer release. Contact the lender First step is to get in touch with the lender who funded the loan and ask if they have a co-signer release option. Complete the required paperwork If the lender provides the option of release then you’ll typically have to fill out paperwork that strips the co-signer out of your loan and makes you the primary borrower responsible for payment of the loan. Only the primary borrower has the right to make this change on the loan. Approval of the lender: There is no guarantee the lender will accept the co-signer release. You’ll need to show that you’re able to handle the loan on your own and have a good credit score and financial resources to maintain repayment. If you decide to make this modification the loan term may be changed. Eliminating a co-signer may also alter the interest rate on your loan especially when the loan was initially accepted based on co-signer’s excellent credit. The main point is switching or removing a co-signer on a car loan isn’t as easy or straightforward as it seems. Often, you will need to pay it off altogether or follow the procedure of completing a co-signer release -depending on whether the lender even provides this option. Be cautious when asking someone else to sign for a loan for you initially and ensure you select one you can trust. Learn more
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Written by Contributing Writer Mia Taylor is a contributor to Bankrate and an award-winning journalist who has two decades of experience and worked as a staff reporter or contributor for some of the nation’s leading newspapers and websites including The Atlanta Journal-Constitution, the San Diego Union-Tribune, TheStreet, MSN and Credit.com. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are committed to helping readers gain the confidence to control their finances by providing concise, well-studied and well-researched content that dissects complicated subjects into bite-sized pieces.
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