As a first time car buyer with no credit history, the car buying process can be a little more difficult; usually, it leads to the buyer needing some assistance from a family member or friend in order to get approved.
Back in July, we received a question from a father who is ready to be removed as a cosigner from his daughter's car loan.
"I cosigned for my daughter's car in February and we are now looking for a bank that will allow her to put the car in her name alone. I am inquiring as to if your company does so, and what the requirements would be. Thank you."
Refinancing a Car Loan
We do not typically work with refinancing loans, as we connect car buyers with car dealerships that work with no credit and bad credit car buyers. However, since it has only been a few months since the loan was approved, our answer to that question would be, "it is most likely too soon to have your name removed." In this instance, that's because lenders usually want to see at least two years of consistent payment history before refinancing the vehicle with just the primary borrower on the loan contract.
However, we can give this person some tips that may help in moving the process along:
- Make sure the available income is still there.
The primary borrower must have the available income to support the monthly payment. Showing the lender that the primary buyer has the income to cover the car payment will help when refinancing the auto loan.
- Establish a credit history.
In order to move forward as a sole borrower on a car loan, a buyer will need to have established a strong credit history. If positive repayment activity in addition to the car loan can be proven, this will definitely help in the process of getting approved for the new loan contract.
- Make consistent, on time payments on the current car loan.
Showing a solid payment history on the existing car loan will help greatly in showing the lender that the primary borrower can be relied upon to make payments in a timely manner.
But keep in mind that when refinancing, there may be additional fees (to change the title and registration), while the borrower may need to cover the difference between the current loan balance and the vehicle's actual cash value (ACV) at the time it is refinanced. If a large enough down payment was made when the original contract was signed, this may not be an issue.
Getting the Help You Deserve
The team at Auto Credit Express has helped millions nationwide rebuild their credit by connecting them with dealers who could get them approved for the car they so greatly needed. We want to do everything possible to ensure that everyone has that chance. Our online application is free and easy to complete, and only takes a few minutes of your time.
If you are looking for a dealer who can help you, come to us. Let us connect you today!