How to Remove a Cosigner From a Reaffirmed Auto Loan

Removing a cosigner from a loan is not possible. Your lender used your cosigner's credit to set your interest rate, loan term and down payment amount. For this reason, you must reapply to your lender or another loan provider for a refinance to remove your cosigner. Your interest rate and term might change, or you might need a down payment to create equity in the vehicle. You also need your cosigner's authorization to refinance your loan.

Instructions

1

Talk to your cosigner before you contact a lender to refinace your car loan. Obtain his approval for the loan transfer, as he is also a partial owner of the car. If your cosigner does not agree to release ownership, you can't refinance your loan.

2

Call or arrive in person to speak to your lender about your intentions. Supply your lender with your credit information, which you must resubmit to obtain a loan approval. Discuss your loan options with a lending representative before submitting your application.

3

Wait for your approval notification, which can take up to one week. Discuss the final approval terms of your loan, such as term, interest rate, fees and whether the lender requires a down payment. Ask your lender which paperwork your cosigner needs to complete to release her portion of ownership.

4

Explain the ownership release process to your cosigner. If your lender is local, the cosigner can likely arrive in person to sign paperwork. If the lender is not local, your cosigner needs to sign various forms, have them notarized and returned to the lender promptly.

5

Sign your new loan paperwork, which usually involves motor vehicle documents and contracts. Keep a copy of all your paperwork for future reference.