Finder may earn compensation from partners, but editorial opinions are our own. Advertiser Disclosure

How to remove yourself as a cosigner on a loan

You usually need the borrower's permission first.

Avatar
Anna Serio
Updated
Fact checked
There’s no way to take yourself off of a loan you cosigned on your own — you’ll need the borrower to be on board. And if you plan on transferring the debt solely to the borrower, they’ll need to meet the eligibility requirements on their own. This means you’re likely out of luck if they have bad credit.

1. Refinance or consolidate

One of the most common ways to get yourself off of a loan you cosigned is to ask the borrower to refinance the loan or consolidate it with other debt. This involves taking out a loan solely in their own name, which they use to pay off the current balance.

Refinancing or consolidating means they’ll need to be able to meet eligibility requirements on their own. If they don’t have strong credit or a high-enough income, they might have a hard time qualifying for a competitive rate. In that case, it might be better to wait or opt for another option.

Compare debt consolidation loans

Data updated regularly
Name Product Filter Values APR Min. Credit Score Loan Amount
Credible personal loans
Credible personal loans
2.49% to 35.99%
Fair to excellent credit
$600 - $100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Go to site
More Info
Best Egg personal loans
Best Egg personal loans
5.99% to 29.99%
600
$2,000 - $50,000
A prime online lending platform with multiple repayment methods.
Go to site
More Info
Upstart personal loans
Upstart personal loans
5.55% to 35.99%
580 or 600 depending on state of residence
$1,000 - $50,000
This service looks beyond your credit score to get you a competitive-rate personal loan.
Go to site
More Info
SoFi personal loans
SoFi personal loans
4.99% to 19.63%
680
$5,000 - $100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.
Go to site
More Info
Upgrade personal loans
Upgrade personal loans
5.94% to 35.97%
600
$1,000 - $50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
Go to site
More Info
loading

Compare up to 4 providers

2. Transfer the balance to a new credit card

Is the remaining balance low enough to pay off in around a year? You might want to suggest the borrower apply for a balance transfer credit card with a 0% intro APR. They can use this to pay off their loan balance, which they won’t have to pay interest on during the promotional period.

It’s a more affordable option than paying off the entire balance at once, which could make it more attractive than refinancing. But they’ll typically also need strong credit and a steady income to qualify.

Compare balance transfer credit cards

%
Name Product Amount saved Balance transfer APR Balance transfer fee Minimum Credit Score Filter values
Citi® Diamond Preferred® Card
Citi® Diamond Preferred® Card
0% intro for the first 21 months (then 13.74% to 23.74% variable)
$5 or 5% of the transaction, whichever is greater
670

Best of Finder 2021

 An impressive 21 months intro APR on balance transfers and purchases, as well as no annual fee make this one of the top 0% APR cards available.
Apply now
View details
Citi Simplicity® Card
Citi Simplicity® Card
0% intro for the first 21 months (then 14.74% to 24.74% variable)
$5 or 5% of the transaction, whichever is greater
670
With an intro APR of 21 months, this card has one of the longest balance transfer offers on the market. Plus, no late fees and no annual fee.
Apply now
View details
Citi® Double Cash Card
Citi® Double Cash Card
0% intro for the first 18 months (then 13.99% to 23.99% variable)
$5 or 3% of the transaction, whichever is greater
670
Get a strong 18 month 0% intro APR on balance transfers AND up to 2% back. This is a rare card that offers both rewards and balance transfers.
Apply now
View details
Citi Custom Cashâ„  Card
Citi Custom Cashâ„  Card
0% intro for the first 15 months (then 13.99% to 23.99% variable)
$5 or 5% of the transaction, whichever is greater
670
A new cashback card that automatically awards 5% to your highest eligible spending category each billing cycle, on up to $500 (then 1%).
Apply now
View details
Citi Rewards+® Card
Citi Rewards+® Card
0% intro for the first 15 months (then 13.49% to 23.49% variable)
$5 or 3% of the transaction, whichever is greater
670
Earn rewards and enjoy a long intro APR period on purchases and balance transfers.
Apply now
View details
loading

Compare up to 4 providers

How to remove a cosigner using a balance transfer

Follow these steps to complete a balance transfer so your cosigner is no longer attached to your loan:

    • 1. Compare balance transfer credit cards and apply

    Compare offers to find a balance transfer credit card with the lowest rate —ideally 0% — for as long as possible. Some cards offer 0% intro periods for as long as 21 months if you have great credit.

    • 2. Transfer your loan balance to your new card

    Follow your card issuer’s instructions to transfer your loan balance and any other debt to your new card. Since this means your loan will be paid off completely, your cosigner will no longer be tied to this debt.

    • 3. Pay off your credit card balance within the intro period

    To save the most money on interest and get out of debt as fast as possible, try to pay off your credit card balance within the intro offer period. Otherwise, you could face a revert rate that’s higher than your loan’s APR was.

    3. Ask about cosigner release

    Some types of loans come with the option to apply for cosigner release — especially private student loans. With cosigner release, the borrower has your name taken off the loan, either while keeping the same rates and terms or with an adjustment based on their finances.

    To qualify for cosigner release, the borrower typically must meet the lender’s credit and income requirements on their own. Some lenders require a one- or two-year history of consecutive on-time repayments as well.

    Most lenders that offer cosigner release don’t advertise it. It’s best to get in touch with the lender after you ask the borrower and they agree to apply.

    4. Sell the asset you financed

    This option only works if you took out a loan to purchase something — like a car. If the borrower can’t qualify for another loan on their own, one option is to sell the item they used the loan to purchase. After the sale, you can put those funds toward paying off the loan balance.

    There are two steps you should take first if you’re considering this option:

    • Check the contract. Make sure there’s no prepayment penalty for paying off the loan early, which often means you’d have to pay the equivalent of any unpaid interest.
    • Get your asset appraised. This is especially important with assets that depreciate over time. If the borrower’s car is worth less than the remaining balance of the loan, you’ll still have a balance left over after the sale.

    5. Repay the balance yourself

    As a last resort, make extra repayments toward the loan yourself. It won’t help you save, but it’ll get you off the loan faster. What’s more is you don’t need the borrower’s permission. This could be useful if you’re trying to get rid of debt before applying for credit yourself — having less debt can increase your credit score.

    Again, check to make sure there are no prepayment penalties before making extra repayments.

    When is the best time to take my name off a loan?

    That depends on the situation. If you’d like to free yourself up to take on other types of debt, it’s best to wait until the borrower is able to carry the loan on their own. This might mean giving them a few years to build their credit, establish a history of on-time repayments and increase their income.

    But if your financial situation has changed for the worse — or you’ve ended up shouldering most of the repayments — you might not want to wait. Talk to the borrower about their options. In a pinch, they might be able to refinance with another cosigner if they can’t qualify for a loan on their own.

    What happens after I’m removed from the loan?

    Several things can happen after you’re removed from the loan:

    • You aren’t responsible for repayments. There’s no longer a risk that the borrower will pass off the responsibility of repaying the debt to you.
    • Your credit score increases. Paying off debt means you’ll have a lower credit utilization ratio, which is the second most important factor in your credit score.
    • Your debt-to-income (DTI) ratio decreases. Since you aren’t accountable for repayments each month, you’ll have a lower DTI. This can also make it easier to qualify for a better deal when you apply for credit.

    Bottom line

    The only way to take yourself off of a loan as a cosigner is to repay the balance yourself. Otherwise, you’ll have to ask the borrower to take steps to remove you as a cosigner. You can learn more about how repaying loans work by checking out our guide to personal loans.

    Frequently asked questions

    More guides on Finder

    Ask an Expert

    You are about to post a question on finder.com:

    • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
    • finder.com is a financial comparison and information service, not a bank or product provider
    • We cannot provide you with personal advice or recommendations
    • Your answer might already be waiting – check previous questions below to see if yours has already been asked

    Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

    By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

    Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
    Go to site