Can a cosigner be removed from a car loan?

Woman signing paper to remove cosigner from car loan


A cosigner can be invaluable when you need help qualifying for an auto loan but, as circumstances change over time, one or both parties may want to remove the cosigner from the arrangement so they can go their separate financial ways.

For their part, the cosigner may no longer wish to bear the risk associated with guaranteeing the loan and the effects on their credit should the borrower default. The borrower, on the other hand, could have become more financially established and doesn’t need the assurance provided by the cosigner.

In these situations, it’s often possible to remove a cosigner from an auto loan and there are various options for borrower and cosigner to consider.


How to remove a cosigner from a car loan

Request a release

Some auto lenders will enable a cosigner to be released from a loan if certain conditions are met. Check your contract or ask the lender if this is available to you.


One of the most straightforward ways to remove a cosigner is for the borrower to refinance the loan on their own. Refinancing involves taking out a new loan, typically with a different lender, that is used to pay off the previous note and provide new terms going forward. This may be an option if you’ve been making regular, timely payments, your credit score has been creeping up the scale and you’re now considered more creditworthy.

Online lenders such as RoadLoans enable consumers to apply for refinancing in a few minutes and get an instant decision. If approved, besides the opportunity to take responsibility for a loan independently, you may enjoy benefits like a lower interest rate or more comfortable monthly payment.*

Pay off the loan

If you have the money, perhaps from a tax return or savings, you could simply pay off the note and live without a car loan completely. You would firstly want to get the payoff amount, which is different to the current balance, from your lender then follow their steps to clear your debt so you can own the car free and clear.

Sell the car

So long as you’re not upside down on the loan, selling the car and using the proceeds to cover the payoff amount is another potential option. The decision to sell the vehicle is that of the borrower because, although the cosigner has obligations to the financing, they have no rights to the vehicle.


See if you can remove a cosigner from your loan

If refinancing sounds like a good option to you, learn more about RoadLoans’ auto refinancing products  and complete our free online application for a quick decision.

Apply for auto refinancing.


*RoadLoans does not accept auto refinance applications from existing Santander Consumer USA and Chrysler Capital customers.


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