People usually take auto loans with a cosigner when they have poor credit scores. Having a cosigner gives their credit situation a much-needed boost. However, this may not be ideal for some people as they may not want to be stuck with a cosigner through their loan tenure. So if you find yourself asking, “can I refinance my car without my cosigner?” we have got you covered.
This article will tell you how to refinance your car by removing your cosigner. Read on.
How to Refinance Your Car Without Your Cosigner
You can remove a cosigner from your contract if you want to refinance without your cosigner. Refinancing your auto loan is an ideal way to remove your cosigner. If you have been paying your monthly payments on time and don’t have any missing or late payments on your car loan, your credit score must have improved considerably enough to make you the car’s sole owner. If that’s the case, your lender would agree to removing the cosigner and making you the car’s sole owner.
By refinancing your loan, you replace your existing auto loan with a new loan with revised interest rates or tenure with no cosigner. However, you will need to meet all your lender’s requirements before you can remove the cosigner. You will also need to have an improved credit score.
Although the specific requirements for refinancing vary, here are the standard conditions by lenders for refinancing auto loans:
- Your vehicle’s age should be less than ten years as cars lose their value over time.
- The maximum mileage on your car should be 140,000 (varies depending on the lender).
- The value of your vehicle should be more than the amount you owe.
- You should meet the minimum loan requirement.
- Your credit score should be above 580.
- You should be paying your monthly payments on time.
However, if you do not meet your lender’s requirements, you should still talk to them if you have a positive payment history. They may agree to remove the cosigner from your auto loan after a certain time before paying off the loan.
That said, do not confuse the cosigner on your auto loan with a co-borrower. A co-borrower does not have the same ownership of your vehicle as you. On the other hand, a cosigner has equal ownership rights to your vehicle. But if you don’t want to share the ownership with them anymore, you can refinance your auto loan to have them removed.
To remove a cosigner from your auto loan, you must meet the lender’s qualifications. If your credit score has improved since you took out the original loan and you don’t need a cosigner anymore, you can refinance your loan to remove them.