Have you ever wondered about how to remove your name from a cosigned loan? Sometimes, we may apply for a loan or credit card with another person only to regret it. We co-sign a loan with others based on trust. When the person does not live up to expectation, we feel betrayed and decide to opt out. In this article, we will learn a lot. They include;
- How the lending institution views each of the co-signers
- The possibility of removing your name as a co-applicant, and
- What you need to do to remove your name from a cosigned loan, credit card and forged loan.
How The Lending Institution Views Each Of the Co-signers
When you cosign a loan or credit card, the bank completely notes that you have some level of trust between yourselves. They as well understand that each of you is willing to pay the debt in case the other does not meet up. It as well means that both of you can be held accountable by the bank when the debt is not paid. Lastly, you, in particular, can go in for it if the other person dies or files bankruptcy.
How to Remove Your Name From a Cosigned Loan; The Possibility of Removing Your Name
From everything above, it’s obvious that removing your name from a co-signed loan is not easy. In some cases not even be possible. The bank only permits you to remove your name when the other person admits willingness to pay the loan alone. This willingness must come with strong evidence. Without this evidence, the possibility is zero.
Removing Your Name From a Cosigned Loan
- Get a cosigner release. If the loan has a program that will release a cosigner’s obligation after a certain number of consistent on-time payments. Let the cosigner release you. Two years of on-time payments seem to be the norm. Carefully your loan documents to see if there’s any type of program linked with your loan.
- Refinance. Yes! Your co-applicant can consolidate the loan into his name. To qualify, he MUST have a good credit history and enough income to make the new loan’s monthly payments. The cosigned loan will still be in your credit report, show evidence that the account is closed and paid in full.
- Sell the asset and pay off the loan. For a home or car loan that the other person isn’t paying for, sell the asset and pay off the loan. Ensure you use your name to sell the property.
Remove Your Name from a Credit Card
For a financial institution to remove your name from a card, there must be no balance on the card. If, there is pay it off before seeking to remove your name.
- Pay off the balance yourself. To safeguard your credit score and history, pay off all the balance. This can be very hard especially when you did not enjoy the card. Also, you can close the account or freeze the credit limit.
- Transfer the balance. Let the cosigner transfer the balance to a credit card in his name only. After the transfer, close the Avoid reopening the card.
Remove Your Name From a Forged Loan
If a relative forges your name on a loan and you discover it, your silence means acceptance. It is only when you report that your name will be removed from the loan. Reporting can get your relative arrested. Confused, right? What to do;
- Ensure that the relative pays off the loan within a short
- Let the person refinance or consolidate the loan or transfer the balance if it’s a credit card.
- Get him to sign an affidavit admitting to the forgery in case he fails to pay off the loan and later try to claim that you cosigned.
When you cannot do anything probably because your conscience won’t permit you. Keep up the minimum payments until the balance is paid off. Continue checking the payment status and avoid late payments.