Car loan question - removing cosigner

yh125d

Diamond Member
Dec 23, 2006
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0
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Backstory: 15 months ago I got a car loan with my brother as cosigner since I had a collection I was working to get rid of.


Fast forward to today, I just got confirmation that the collection has been deleted from all my credit reports.

I would like to get my brother taken off as cosigner, to free him of this loan, both to help his income/debt ratio (he wants to buy a new car soon) and to save me like $30 in GAP/death/disability insurance a month. Is this a common request at all? I'd rather not refinance, as I don't need to get any of the equity I have in the car nor lower the payments or stretch them out, but I'd just like to be the only person on it. Is this possible?
 

spacejamz

Lifer
Mar 31, 2003
10,797
1,446
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Calling the finance company would yield a more productive (and probably more accurate) response than what you will get here, especially since each company probably has their own policy regarding this type of request.
 

dullard

Elite Member
May 21, 2001
25,054
3,408
126
Banks don't like to remove cosigners. Think of it from their viewpoint. They'd be taking more risk and you are doing nothing in exchange. That isn't a very good deal for them to make.

You'll probably have to refinance. There is no reason that you have to get equity or lower payments or strech out payments if you refinance though. With your better credit now that the collection is gone and your 15 months of paying a loan on time, you might just get a better interest rate too.
 

DesiPower

Lifer
Nov 22, 2008
15,366
740
126
Generally speaking, the only way to get a co-signer removed from a car loan is to refinance the loan. That said, there are indications recently that lenders have begun loosening their credit requirements a bit, so while your credit score may have required you to find a co-signer or make a larger down payment in the past, it may not now.

Start by reaching out to other lenders to see if they'll refinance your auto loan on your credit alone. To see current rates and lenders, check out Bankrate.com's auto refinance tool. If they won't, you might see if a lender will agree to remove the co-signer after you've made a certain number of on-time payments but before you've paid off the loan.

Read more: Removing a car loan co-signer http://www.bankrate.com/finance/auto/how-to-remove-a-co-signer-from-a-car-loan.aspx#ixzz1NCW0nmgE

-bankrate
 

Scotteq

Diamond Member
Apr 10, 2008
5,276
5
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You can call your lienholder and ask if you may refinance in your own name. Basically, that means "Take Out A New Loan To Pay Off The Old One". As above - It may or may not be a good deal, depending on current rates and your history.
 

yh125d

Diamond Member
Dec 23, 2006
6,907
0
76
As for my history, it is spotless right now although short at only 2.5 years. Before I had this car loan I had another loan for the same amount for a year which was paid off when my car was totaled
 

spidey07

No Lifer
Aug 4, 2000
65,469
5
76
Anytime you change names on a loan you typically have to refinance as you are entering into a new agreement/terms.
 

yh125d

Diamond Member
Dec 23, 2006
6,907
0
76
Well then about refinancing, how will that show up on my history? It will just be the old loan showing as paid and then a new one right?
 

OCGuy

Lifer
Jul 12, 2000
27,227
36
91
You most likely have to do a new loan in just your name. Bank's have no reason to "remove" co-signers.

Yes, your old loan will show paid and you will have a new one if you refinance.
 

smitbret

Diamond Member
Jul 27, 2006
3,389
23
81
You'll have to refi. It's illegal in many states for a bank to refinance their own auto loan. Some institutions have ways around that, though.
 

smitbret

Diamond Member
Jul 27, 2006
3,389
23
81
I'm not sure why that is. The law differs some state to state and many banks have workarounds for this even when it is. Spidey07 is right, give your bank a call and see what they say.