How To Get A Name Off A Joint Car Loan
Taking out a joint auto loan or acting as a co-signer for someone’s auto loan can bring many benefits. Lenders might be willing to offer more attractive loan terms, including lower interest rates and better repayment options, if they know the financial resources of two people are backing the loan. However, situations can arise that might call for you to remove your name from a joint auto loan. Here are some ways to remove a name off of a joint car loan. To discuss your unique and personalized situation, contact our team online at North Coast Auto Mall to find understanding, compassionate help.
How Can You Remove Your Name From a Joint Auto Loan?
The easiest way to remove your name from a joint auto loan is to arrange for the other borrower to refinance. Refinancing is when you agree to new loan terms to cover the outstanding balance of the item you’re paying for. Typically, you arrange refinancing with a different lender than the one you had the original loan with, but it is also possible to refinance through the existing lender.
If you’re thinking about getting the other party to refinance your joint loan, there are a few points to keep in mind. First, the vehicle must have equity, meaning it’s worth more than the outstanding balance on the loan. In addition, the vehicle must be less than 10 years old and have been driven fewer than 100,000 miles.
The other borrower also typically needs to have a better credit rating than they had when the first took out the loan. If this is the case, they might be able to either refinance the loan with a lower interest rate or lengthen the term of the loan to reduce monthly payments so they can afford to pay off the loan themselves.
If refinancing isn’t an option, consider paying off the loan so your name is no longer associated with an open line of credit. This is a particularly attractive option if the balance remaining on the loan is relatively low and you have the money to cover it. By getting rid of the loan, you’ll remove the risk of having your credit score damaged by missed or late payments made by the other party. This can be especially important if you’re planning to take out another loan soon, since lenders will want to see that you have a good credit score.
If you can’t or don’t want to pay off the loan, consider trying to improve the other person’s credit score. For example, if they make regular payments on credit cards or their auto loan for several months in a row, their credit score is likely to increase. This might put them in a better position to apply for refinancing and remove your name from the loan in the future.
Once your name has been removed from the loan, you might still need to take care of additional paperwork associated with the car. For instance, if you had a joint loan, you might also have joint auto insurance, and the vehicle might be registered under two names.
Why Remove Your Name From a Joint Auto Loan?
You might have taken out a joint auto loan with your spouse or a relative. Alternatively, you might have acted as a co-signer for a relative or close friend with bad credit to help them secure a loan. Regardless of why your name is on the joint auto loan, several situations might cause you to want to remove it.
If you’re a co-signer and the primary borrower isn’t making regular payments. Under these conditions, the primary borrower’s failure to pay won’t just harm their credit rating; it can pull your credit rating down as well.
Finally, your ex-spouse or the primary borrower on a co-signed loan might decide they want to sell the car. Completing an auto sale is often easier if the loan associated with it has been paid off. Therefore, this might be a situation where you help make the necessary repayments to close the loan to facilitate the sale.
What Are the Differences Between a Joint Auto Loan and a Co-Signed Auto Loan?
A joint auto loan and a co-signed auto loan have several important differences you should know about. If you have a joint auto loan with your spouse or someone else, the car you purchased with the loan belongs to both of you. This means you have an equal say in how it is used or whether it is sold. By contrast, if you cosign a loan to help someone with poor credit secure better terms, you don’t have a say in how the vehicle is used. That’s because the car or SUV belongs to the primary borrower.
Despite these differences, joint loans and co-signed loans can have a similar impact on your credit score. For instance, your credit score might be negatively affected regardless of whether your spouse misses payments on your joint loan or the primary borrower misses payments on a loan you’ve co-signed.
Find Understanding Car Loan Help and Assistance at North Coast Auto Mall
We hope our tips on how to get your name removed from an auto loan have helped you better understand the process. Here at North Coast Auto Mall in Akron, we provide great terms on used car loans for Ohio customers looking to secure high-quality used cars. You can contact us or stop by our showroom to learn more about our competitive financing options and the wide range of used vehicles available in our inventory. We look forward to helping you get behind the wheel of your next car.