So, you’ve had your car loan for some time now. You decided you want to remove the cosigner and take on the loan by yourself. There aren’t many options to choose from, but, with careful planning, it can be done through refinancing.

Refinancing a Car Loan to Remove a Cosigner

We aren’t lenders, so Auto Credit Express can’t refinance car loans. But what we can do is give you some tips on the process of refinancing a car loan.

Generally, lenders like to see at least two years of consistent payment history before refinancing a vehicle loan, allowing you to remove the cosigner. If your car loan hasn’t hit the two-year mark, the chances you’ll be able to refinance your vehicle are slimmer.

refinancing, cosignerIn the meantime, there are things you can do to prepare for it:

  • Income – Have your income or bills changed? If so, you’ll want to make sure you’ll meet a lender’s debt to income (DTI) ratio and payment to income (PTI) ratio requirements. If your income has increased, great. If not, you may have trouble getting approved. A good tip: use an auto refinance calculator to see how much money you’ll be saving by refinancing.
  • Credit – Building your credit back up is one of the most important things to do before refinancing an auto loan as the primary borrower. Improving your credit will increase your chances of getting approved.
  • Your loan payments – Making on-time payments with your current loan will show lenders you're serious about repairing your credit. If you have any missed payments, your chances of getting refinanced are slim to none.
  • Be aware of additional fees – Make sure you understand the potential extra costs that come with refinancing a loan. Lenders may charge you to change the title. If you have negative equity, you will probably have to pay the difference between the current loan balance and the actual cash value (ACV) of your vehicle.

Bottom Line

You can typically only remove a cosigner from an auto loan by refinancing your vehicle. Plan ahead and make sure you’re prepared when it’s time to refinance the loan.

If you’re looking into financing a car loan, but aren’t sure where to start, let Auto Credit Express lead the way. We work with a nationwide network of special finance dealers who have the lenders willing to work with people in difficult credit situations. Get started today, so we can match you with a local dealer. Simply fill out our online auto loan request form to start the process.