Grace Enfield, Content Writer
Yes, you can remove a cosigner from a loan. To remove a cosigner from a loan, you will need to get a loan release, which is permission from the lender to remove the cosigner's name from the loan agreement, or you can pay off the loan or refinance it with a new loan or credit card.
Removing a cosigner from a loan is fairly similar for different types of loans, like car loans and personal loans, except for a few nuances. For instance, in the case of a car loan, it's important to remember to retitle the car if both the primary borrower's name and the cosigner's name are on the title.
Ways to Remove a Cosigner from a Loan
Get a loan release
A loan release is a document that you need to fill out with the lender to remove the cosigner's name and make you the sole borrower.
To get a loan release, the primary borrower will need to make a certain number of on-time payments and meet the requirements to have the loan on their own. Some requirements include meeting the lender's credit score threshold and having enough income to make the monthly payments.
Not all lenders offer loan releases, though.
Refinance the loan with a new loan
The primary borrower can refinance the loan with a new loan, as well. Refinancing means taking out a new loan with a lower APR to pay off the existing debt.
The primary borrower will have to meet the requirements to get a new loan because the cosigner will not be on the new loan agreement. Some requirements include being at least 18 years old, having enough income to make monthly payments and meeting the lender's credit score requirement.
To see the top-ranked offers, check out WalletHub's picks for the best personal loans for refinancing. You can also estimate your rates with the free pre-qualification tool on WalletHub.
Transfer the loan to a balance transfer credit card
To refinance the loan with a balance transfer credit card, the primary borrower will have to transfer the loan's balance to the card and then repay the balance to the card's issuer. To see how much a balance transfer credit card may save you, check out the balance transfer calculator on WalletHub.
Pay off the loan
Paying off the loan is an expensive solution to removing the cosigner from the loan. But if you have the funds, it will get the job done quickly.
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