The good news is that you don’t need your cosigner’s permission to refinance your car. Things can get tricky if your credit score isn’t good enough to qualify for refinancing, though. We're covering typical refinancing requirements you may need to meet, and how refinancing impacts your cosigner.
Can My Cosigner Stop Me From Refinancing?
Cosigners are useful for borrowers with poor credit. They can help you get into a car loan if your credit score isn’t good enough for an auto lender’s requirements. And, even better – the cosigner has no say in what you can or can’t do with your vehicle.
If you decide to refinance your vehicle or sell the car, you can do either without needing your cosigner’s permission. They have no rights to the vehicle since their name isn't listed on the title. You don’t need to bring them to meet the refinancing lender when you apply for refinancing, either.
Refinancing is when you replace an auto loan on the same vehicle. The refinancing lender pays off the original loan, and once that’s paid off, your cosigner no longer has any obligation to the loan because it’s completed!
The only issue you may run into refinancing a car that you needed a cosigner to originally qualify for, is qualifying for refinancing by yourself.
Refinancing With Poor Credit
Borrowers typically need a cosigner when their credit score isn't great. A cosigner lends you their good credit score to meet the loan qualifications. Just like auto financing, refinancing typically comes with requirements.
Here are some typical refinancing requirements:
- You’ve had the auto loan for at least one year
- You’ve stayed current on the car loan
- The vehicle is under 10 years old with less than 100,000 miles
- Your car has equity (vehicle’s value is higher than the loan balance)
- Your credit score is good or has improved
Lenders may only consider you for refinancing if your credit situation has improved since the start of your auto loan. Recent, serious delinquencies can get in the way of refinancing, but if your credit score has been on the rise, the odds may be in your favor.
If you’ve been maintaining a good payment history on your car loan and keeping up with the rest of your bills, you may have a higher credit score now. Installment loans such as car loans can be great avenues for credit repair if you make all the payments on time.
Lender requirements vary, of course, but those are pretty common. If you’re feeling confident in your ability to qualify for refinancing, then check with our trusted partner for more information.
Refinancing Not an Option?
If you’ve missed a few payments on your car loan or your credit score still isn’t great, then you may struggle to qualify for refinancing. If your goal with refinancing was to remove the cosigner, selling the vehicle can accomplish this, too.
Remember that cosigners can’t stop you from selling the car (although it may be more polite to tell them if you do!). If you manage to sell the vehicle and completely pay off the lender, then you and the cosigner are both off the hook. But, if you need another car after the sale and you want to go it alone, pursuing a subprime auto loan may be for you.
Subprime car loans are for borrowers with less than perfect credit. Many borrowers with bad credit are eligible for vehicle financing without the help of a cosigner if they can meet the requirements. Finding a subprime auto loan can be tough if you don’t know where to look, but we want to help with that!
Here at Auto Credit Express, we’ve created a coast-to-coast network of special finance dealerships that are signed up with subprime lenders. Once you complete our auto loan request form, we’ll look for a dealer in your local area for free with no obligation. Get started on your path to a car loan today!