Get Started
Talk to our team to start saving 800.260.5355
If you’re a young adult buying your first car, or if you’re building (or re-building) your credit, having a cosigner can make it easier to qualify and be approved for a car loan.
But with the average car loan lasting more than 60 months, you might be ready to move forward without your cosigner long before the car is paid off. Fortunately, you can refinance your car without your cosigner. But before you do, you’ll need to make sure you meet criteria like your lender’s credit requirements and your car’s loan-to-value (LTV) ratio.
This article breaks down what you need to know about auto refinancing solo, from eligibility requirements to what lenders look for.
Your cosigner may have helped you get approved, but if your financial situation has changed, refinancing your car loan to remove your cosigner could be beneficial for you both.
Here are a few common reasons you might want to refinance to remove a cosigner:
Your cosigner might also be ready to take their name off their loan. Doing so could improve their credit utilization, help their credit score, eliminate their financial risk, or simplify shared finances to avoid potential conflicts.
Refinancing your car loan to remove a cosigner can give you full control over your loan and help build your credit. But to qualify on your own, you may need to improve your finances and meet lender requirements.
Here’s how to refinance a car loan without a cosigner in five steps:
If you needed a cosigner for your original auto loan, lenders may have viewed you as a higher-risk borrower. That could have been due to a low credit score, unstable income, high debt levels, or a short credit history.
Before you consider refinancing your car loan to remove a cosigner, you need to demonstrate financial stability. Lenders typically like to see:
Taking steps to improve your credit, pay down existing debt or increase your income can make you a stronger applicant. Even small changes like making on-time payments or reducing credit card balances can improve your financial profile and boost your chances of successfully refinancing without a cosigner.
Before refinancing, take a close look at your existing loan. Key details like your interest rate and remaining balance can impact whether refinancing makes financial sense.
Understanding your monthly payment structure and loan length will also help you compare offers, ensuring you find a deal that fits your needs.
When you refinance a car loan to remove a cosigner, you get an all-new loan, so it pays to find the best rates. Lenders offer different interest rates and terms, so shopping around is key.
Use the RefiJet auto refinancing calculator to see how much you might be able to save with a new loan. Then, research banks, credit unions and online lenders to find the best refinancing options. Refinancing marketplaces like RefiJet can help you quickly get multiple quotes from lenders and prequalify to determine your loan eligibility without affecting your credit.
Refinancing a car loan to remove a cosigner requires a few key documents. Be prepared to provide:
Lenders may also request additional documents to verify your creditworthiness or financial stability. For a complete checklist, check out our guide to car loan refinancing documents.
Once you've gathered your paperwork and compared lenders, it's time to apply for a new loan without your cosigner.
If approved, you’ll receive a loan offer outlining your interest rate, monthly payment and repayment terms. Review the offer carefully. If you accept, your new lender will pay off your existing loan, remove your cosigner and set up your new loan. Your lender will handle any necessary title changes after refinancing.
If you want to refinance a car loan to remove a cosigner, timing is important. If you feel financially steady enough to handle the payments on your own and you can meet the lender’s requirements, then you can feel confident applying for a new loan.
Here are some signs the timing is right to refinance on your own:
At RefiJet, we’re here to make car loan refinancing friendly and simple. Learn more about our refinancing process and see what you need to get started.
No, you don’t need both parties to refinance a car loan. If you want to refinance your auto loan to remove a cosigner, you can apply for a new loan in your name only.
Yes, refinancing is a common way to remove a cosigner from a car loan. The new loan pays off your existing one, transferring full responsibility to you.
Refinancing is the primary approach to removing a cosigner, but some lenders offer other options. You may be able to request a cosigner release, pay off your loan early or transfer your loan to another borrower — if your lender allows it.
You might experience a temporary drop in your credit score when you apply, but the effect is usually minor. Prequalifying for a refinance lets you see what your rates might be without a hard credit check. After the refinance, keep making your payments on time to protect your credit score.
It depends on the lender, but most want to see that you’ve made at least one year of timely payments before refinancing your loan.
Adding a cosigner to your application is a common way that people with bad credit can qualify for an auto loan refinance. The cosigner’s credit history shows the lender that the loan will be repaid, because the cosigner promises to pay if you cannot.
Deciding between a lease buyout loan and new car financing? Compare costs, flexibility, and long-term value to find the best option for your situation.
