How to Refinance Car Loan to Remove a Cosigner

Starting a credit history can be tough. Even tougher if you are an international student studying in the U.S. on a visa. One of the easier ways to get loan options is to get a cosigned loan. Cosigners provide their creditworthiness for your credit applications. They help you to get better loan options. But what can you do if you want to get a cosigner removed from a loan?

There are a few ways to remove a cosigner from a loan. We’ll show you these options and also look at how to refinance car loans to remove cosigners. It’s much easier than you’d think. This is how you can do it.

Is it Possible to Remove a Cosigner from an Auto Loan?

Cosigned loans help the beneficiary tremendously. They get cheaper loan offers, better interest rates, and possibly get access to loans they won’t qualify for without the cosigner’s credit history.

Whether cosigned student loans or cosigned auto loans, is it possible to remove a cosigner? Yes, it is and there are a few ways to get it done.

Ways to remove a cosigner from an auto loan:

Pay Off the Debt

A loan that has been repaid will automatically remove a cosigner from it. This is the simplest of ways to do it, but it may take time to repay an auto loan. You could repay it all at once or you’d have to settle it in monthly repayments. But this may not settle the debt fast enough to get the cosigner released early enough.

Release the Cosigner

Some lenders will allow the cosigner to be released from the credit agreement. This helps the cosigner remove the debt from their name. All liability shifts to the principal borrower. This sounds simple, but the principal borrower must comply with a series of eligibility criteria before the lender will allow it. The borrower must prove they possess the ability to settle the debt on their own without any assistance from the cosigner. Then the lender may release the cosigner from the debt.

Sell the Car to Pay Off the Loan

Most auto loans require a deposit. The deposit can have a positive effect on the solvency of the loan. The value of the car can be higher than the outstanding balance of the debt. You can sell the vehicle and use the proceeds to repay the loan. Then the cosigner will be released from the debt since it has been repaid.

Refinance the Car Loan to Remove the Cosigner

The principal borrower can refinance the auto loan in their own name to remove the cosigner. The borrower gets a new loan agreement possibly from a different lender. The old loan agreement closes and the debt is removed from the cosigner’s name. Refinance your car loan in your own name and your cosigner will automatically be removed.

While there are several methods to relieve a cosigner from a loan, refinancing stands out as one of the most direct and efficient options. However, it’s important to recognize that not all strategies may be viable for every borrower, as eligibility requirements can vary significantly and may sometimes be beyond the borrower’s current financial capability. Refinancing to remove a cosigner from a car loan emerges as a particularly appealing option for many, given its potential to simplify the borrower’s financial commitments while simultaneously benefiting the cosigner.

For those considering this route, exploring refinancing options through platforms like Fiona can offer valuable insights into available loan products, helping borrowers find a suitable new agreement that aligns with their financial goals and capabilities. This step towards refinancing can significantly impact both parties’ credit health and financial independence.

Top 6 Personal Loans for Auto Refinancing

When it comes to auto loan refinancing, there are various lenders in the market who offer diverse interest rates, loan terms, and minimum credit score requirements. However, we have identified a few key players that stand out for their unique attributes. Here are our top picks for auto loan refinancing:

1. AmOne (Best for Good and Okay Credit)
2. Spotlight Loans (Best for Bad Credit)
3. Spring Loans (Best for Bad Credit)
4. First Premier Lending (Best for Bad Credit)
5. Upgrade (Best for Quick Disbursement)
6. RefiJet (Best for Lower Credit Scores)

Read on to learn more about each of these auto refinancing lenders!

1. AmOne (Best for Good and Okay Credit)

AmOne provides a platform that specializes in matching borrowers with suitable refinancing options. For individuals looking to refinance auto loans and remove a cosigner, AmOne can connect them with lenders offering solutions that address their specific needs.

Check rate on website

on website

AmOne Personal Loan

4.5

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

600

Fixed APR

3.99%-35.99%

Variable APR

N/A

View details

Overview

• Minimum credit score: 600.
• Fixed APR: 3.99%-35.99%.
• Loan amounts: $1,000 to $50,000.
• Repayment: 1 to 7 years.

Qualifications

• Must be at least 18 years old.
• Must be a U.S. citizen or permanent resident.
• While there’s no specific income requirement, a consistent source of income is essential for the applicant.

Pros

• Suitable for individuals with lower credit scores.
• No cost for the matching service.
• Attractive loan rates.

Cons

• Acts as an intermediary, not a direct lender.
• Risk of multiple contacts from prospective lenders.
• Lack of clarity on lender details.

2. Spotlight Loans (Best for Bad Credit)

By prioritizing rapid funding and versatile loan options, Spotlight Loans caters to individuals seeking personal loans for various reasons, from funding major life events to covering urgent financial needs, with a focus on inclusivity for all credit types.

Check rate on website

on website

Spotlight Loans

4.8

Stilt rating

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

None

Fixed APR

6.63% and up

Variable APR

N/A

View details

Overview

• Minimum credit score: n/a
• Variable APR: 4.99% and up
• Loan amounts: $100 – $5,000
• Repayment: Depends on choice of lender

Qualifications

• Be 18 years of age or older
• Have a checking or savings account
• Have regular income
• Have a fair credit rating

Pros

• Spotlight Loans is willing to work with individuals who have less-than-perfect credit, making it a viable option for those who may struggle to secure loans from traditional lenders​​​​.
• Spotlight Loans offers same-day approval and funding, which is beneficial for those in urgent need of funds. This makes it a good option for emergency financial situations​​.
• Unlike traditional payday loans, Spotlight Loans provides the option to repay the loan over a period of months, offering more flexibility in repayment planning​​​​.

Cons

• One of the most significant drawbacks of taking a personal loan with Spotlight Loans is the potentially high interest rates. With APRs that can be much higher than traditional personal loan lenders, this can lead to substantial interest payments over time​​.
• Spotlight Loans offers loan amounts that are relatively low, which may not be sufficient for all borrowers’ needs​​​​.
• Spotlight Loans services are not available in all states, so it’s important to check if you reside in an eligible location before applying​​.

3. Spring Loans (Best for Bad Credit)

Spring Loans offers a broad spectrum of refinancing choices tailored to various scenarios, including removing a cosigner from an auto loan. Their flexible terms and diverse lender network can be beneficial for borrowers seeking a streamlined and potentially lower-cost loan solution without the need for a cosigner.

Check rate on website

on website

Spring Loans Personal Loan

4.2

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

View details

Overview

• Minimum credit score: None.
• Fixed APR: 27.00%
• Loan amounts: $3,000.
• Repayment: 48 months.

Qualifications

• Demonstrate a recurrent income.
• Minimum age prerequisite: 18 years.
• Validate U.S. citizenship status with an SSN.
• Provide a legitimate U.S. driver’s license or a state identity card.
• Establish a functional bank account for incoming deposits.
• Adhere to any specific demands by the loan provider.

Pros

• Open to applicants with any credit background.
• Four-year loan period aids in structured financial management.
• The $3,000 offer addresses several short-term financial challenges.
• Wide-reaching eligibility criteria invite a broad spectrum of applicants.
• The focus on dependable income over job title benefits varied income sources.

Cons

• The set 27% APR is higher than many alternatives.
• Restriction to a $3,000 loan might not cover all financial outlays.
• Possessing specific IDs is mandatory, sidelining some applicants.
• A prerequisite for an ongoing bank account may limit certain users.

4. First Premier Lending (Best for Bad Credit)

First Premier Lending understands the nuances of auto refinancing and offers customized solutions for those wanting to stand independently without a cosigner. Their range of refinancing options provides borrowers the chance to modify their existing loan terms to better fit their current financial situation.

Check rate on website

on website

First Premier Lending Personal Loan

4.2

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

View details

Overview

• Minimum credit score: None.
• Fixed APR: 27.00%.
• Loan amounts: $3,000.
• Repayment: 48 months.

Qualifications

• Maintain a consistent source of income.
• Must be at least 18 years of age.
• Possess valid U.S. citizenship and a legitimate social security number.
• Hold a current U.S. driver’s license or state-issued ID.
• Keep an active bank account for direct deposit.
• Satisfy any lender-specific criteria, such as credit rating, borrowing history, or place of residence.

Pros

• No minimum credit score requirement allows accessibility for those with varied credit histories.
• 48-month term provides clarity and allows for long-term financial planning.
• Specific loan amount of $3,000 can meet many short-term financial needs.
• Broad set of qualifications make the loan accessible to a wide range of people.
• Emphasis on consistent income, not necessarily employment type, allows flexibility for borrowers.

Cons

• A fixed APR of 27% is relatively high.
• Loan amount is capped at $3,000, which might not cater to larger financial requirements.
• Requirement of a U.S. driver’s license or state-issued ID could exclude some individuals.
• Mandatory active bank account could be limiting for those who are unbanked.

5. Upgrade (Best for Quick Disbursement)

Upgrade offers transparent and competitive auto refinancing options. For individuals aiming to remove a cosigner from their auto loans, Upgrade can provide the necessary resources and refinancing plans to help them achieve this goal efficiently.

Check rate on website

on website

Upgrade Personal Loan

5.0

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

560

Fixed APR

8.49% - 35.99%

Variable APR

N/A

View details

Overview

• Minimum credit score: 560
• Fixed APR: 8.49% – 35.99%
• Loan amounts: $1,000 to $50,000
• Repayment: 3 to 5 years (7 years on some larger loans)

Qualifications

• Possess an active bank account.
• Able to provide a legitimate email address.
• Minimum age requirement: 18 years (19 for Alabama residents).
• Credit score of 600 or higher.
• Annual income of $25,000 or more.

Pros

• Willing to accommodate borrowers with a credit score as low as 560.
• Offers flexibility with a range of loan amounts from $1,000 to $50,000. This can be suitable for both small and large financial needs.
• Provides options for repayment, allowing borrowers to choose a timeline that best suits their financial situation.
• Once approved, borrowers can access funds in just one day, which is useful for urgent financial needs.

Cons

• Origination fees can go as high as 9.99%, which might add a significant cost to the loan.
• Apart from the origination fee, there are fees for late payments and failed payments, which can add up if one is not careful.
• While there is an option to extend repayment for larger loans up to 7 years, it’s not standard for all loan amounts.

6. RefiJet (Best for Lower Credit Scores)

Specializing primarily in auto refinancing, RefiJet’s approach is designed to offer borrowers flexibility and clarity in their loan terms. For those who wish to refinance and eliminate a cosigner, RefiJet can be an ideal platform to explore, ensuring a smooth transition and potential savings.

Check rate on website

on website

RefiJet Refinancing Personal Loan

3.5

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

550

Fixed APR

4.54-21.99%

Variable APR

N/A

View details

Overview

• Minimum credit score: 550.
• Fixed APR: 4.54-21.99%.
• Loan amounts: $5,000-$100,000.
• Repayment: 24-84 months.

Qualifications

• A FICO credit score of at least 550 is required.
• Credit history requirements differ among lenders.
• The minimum annual gross income is set by individual lenders, with $30,000 being the lowest known requirement.
• The debt-to-income ratio should not exceed 60%.
• Applicants should have no open or discharged bankruptcies in the last 12 months.
• Services are accessible in all 50 states.

Pros

• Pre-qualification is possible using a soft credit inquiry.
• Automatic payment can lead to rate discounts with certain network lenders.
• Services span across all states.
• Customer support is accessible on Saturdays.
• The website features a Spanish version.

Cons

• An origination fee up to $395 may apply.
• A fully online application process isn’t offered for those who desire it.

Benefits of Removing a Cosigner from an Auto Loan

Why would you want to remove a cosigner from a loan? Are there benefits to removing a cosigner? Let’s look at some reasons why you want to refinance a car loan to remove a cosigner. You can also consider international student loans with no cosigner.

Cosigner No Longer Responsible

Perhaps the cosigner is a close friend or relative of yours. The fact that they are your cosigner may be straining your relationship with them. Refinance and get them removed from your car loan. Your relationship will take less strain when you remove the financial pressure that surrounds it. You could even release a cosigner from an international student loan.

Some cosigners ask to be removed from a loan. You can follow the same procedure when your cosigner asks to be removed from your loan. Use the tips provided here to find the best way to get it done.

Cosigner’s Credit Score No Longer Affected

A cosigner is also part of the loan. Your cosigner’s credit score is affected by the loan. Their credit score will also decrease if you miss payments. But they won’t be affected by your payment habits once you remove them from your loan. Remove them from your car loan to keep a separation between your credit scores.

Possible Better Interest Rate for You

You’ve had some time to build your credit history. Your credit score is much stronger since you took out the car loan. You can now apply for loans in your own name and get better interest rates. The main goal of refinancing is to get cheaper interest rates. Refinance your auto loan and you could possibly get lower interest rates.

Possible Lower Monthly Payments for You

Lower interest rates cheapen your monthly repayments. The interest on your loan accrues much slower. This helps to lower the monthly payments required by your loan. It will not only ease your budgeting efforts, but it may also help you repay your loan faster. Repay your loan faster than what is required by your lender to improve your credit score even more.

Read More

• How To Refinance Your Indian Student Loan in the U.S.
• How to Refinance Your Payday Loan

Conclusion

A cosigner can help you get car loans you would never qualify for on your own. It helps you get the loans you need to succeed in life. It also helps you start your credit history. Cosigned loans can get cheaper interest rates than what you would qualify for on your own.

But after a few years of faithful repayments, your situation changes. Perhaps your cosigner no longer wants to be part of your car loan. Maybe you want to remove your cosigner from your car loan for various reasons. There are many ways to do this, as mentioned above. One of the best ways to do it is to refinance your car loan to remove a cosigner.

You can get much better interest rates, lower monthly payments, and possibly repay your loan much faster if you refinance it. Look for lenders who are willing to help you and apply. The best loan offers will most likely be the cheapest. Get your car loan refinanced today.

Furthermore, let’s not forget that matching with the right loan is simple and convenient. No matter your financial needs, the ideal solution is at your fingertips. Visit Fiona to easily find a loan that suits your requirements, ensuring a smooth and effortless process.

Frequently Asked Questions (FAQ)

Can I Refinance My Car Loan to Remove a Cosigner?

Yes, you can refinance your car loan to remove a cosigner. This involves taking a new loan to pay off the existing one, transferring the loan solely into your name.

What Are the Requirements to Refinance a Car Loan Without a Cosigner?

To refinance without a cosigner, you generally need a good credit score, stable income, and a history of on-time payments. The lender will reassess your financial situation to ensure you can handle the loan independently.

How Does Refinancing Affect the Cosigner?

Refinancing removes the cosigner’s legal obligation from the original loan. They will no longer be responsible for the loan once it’s refinanced solely in your name.

Will Refinancing My Car Loan Affect My Credit Score?

Refinancing a car loan can affect your credit score initially due to the credit inquiry and the new credit account. However, consistent on-time payments can positively impact your score over time.

Can I Refinance If I Have Bad Credit?

Refinancing with bad credit can be challenging. Lenders might be hesitant to offer a loan without a cosigner if your credit is poor. Improving your credit score first may be beneficial.

What Are the Benefits of Refinancing to Remove a Cosigner?

The benefits include releasing the cosigner from financial responsibility, potentially obtaining better loan terms, and the opportunity to build your credit independently.

How Do I Start the Refinancing Process?

To start refinancing, research lenders who offer auto loan refinancing, compare rates and terms, and apply for the loan. You’ll need to provide details about your current loan, your car, and your financial situation.

Are There Any Downsides to Refinancing a Car Loan?

Possible downsides include fees associated with refinancing, a higher interest rate if your credit isn’t strong, and extended loan terms which could increase the overall interest paid.

Can I Refinance a Car Loan More Than Once?

Yes, you can refinance a car loan more than once if you find better terms or your financial situation improves. However, each refinancing application may impact your credit score.

How Long Does It Take to Remove a Cosigner Through Refinancing?

The time it takes to remove a cosigner through refinancing depends on the lender’s process. It can vary from a few days to a few weeks from application to loan approval and payoff of the original loan.