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Refinancing to get a cosigner off a loan?

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Anonymous
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Refinancing to get a cosigner off a loan?

Well I've managed to royally screw my life up and am trying to take the first steps to fixing it. 2 years ago my credit was non-existent and when my car died I had to buy a new one. My fiance cosigned on a loan for me, and needless to say we aren't doing too well right now. The car is my only real asset, I'm looking at having to move all the way back to California from Florida and his name is the primary on the car. I pay for the car every month and made the down payment as well. I don't think he would try to take the car from me but I want all my bases covered. My credit history is about 3 years old now, I have a 750 Experian FICO score with no marks, no late payments on my record and 20% utilization with 5 credit card accounts. My current auto loan is through Honda Financial with an interest rate of 3%. I would really like to try to keep an interest rate that low. Anyone have recommendations on who to refi through? I bank with Well's Fargo but am not exactly thrilled with them. I'm not sure how the refinance process is different when it comes to refinancing specifically to get a name off a loan. Would it be easier to trade the car in and get a new loan entirely? Help!

4 REPLIES 4
Anonymous
Not applicable

Re: Refinancing to get a cosigner off a loan?


@Anonymous wrote:

Well I've managed to royally screw my life up and am trying to take the first steps to fixing it. 2 years ago my credit was non-existent and when my car died I had to buy a new one. My fiance cosigned on a loan for me, and needless to say we aren't doing too well right now. The car is my only real asset, I'm looking at having to move all the way back to California from Florida and his name is the primary on the car. I pay for the car every month and made the down payment as well. I don't think he would try to take the car from me but I want all my bases covered. My credit history is about 3 years old now, I have a 750 Experian FICO score with no marks, no late payments on my record and 20% utilization with 5 credit card accounts. My current auto loan is through Honda Financial with an interest rate of 3%. I would really like to try to keep an interest rate that low. Anyone have recommendations on who to refi through? I bank with Well's Fargo but am not exactly thrilled with them. I'm not sure how the refinance process is different when it comes to refinancing specifically to get a name off a loan. Would it be easier to trade the car in and get a new loan entirely? Help!


Trading a car in will be easier but you will lose whatever you already have into car. Unless u want a new car and trade in current car (will need ex to sign transfer paper too). Honda does have 0% apr for new vehicle and with ur score u shouldn't have a problem getting 1.99 with a credit union which in turn will make u a cash buyer at dealership and normally dealership have rebates for cash buyer. Refinancing I can say your interest will be higher then the 3% your paying now. If u know he won't take car from u it shouldn't be a problem.

Message 2 of 5
RonM21
Valued Contributor

Re: Refinancing to get a cosigner off a loan?


@Anonymous wrote:

 


Trading a car in will be easier but you will lose whatever you already have into car. Unless u want a new car and trade in current car (will need ex to sign transfer paper too). Honda does have 0% apr for new vehicle and with ur score u shouldn't have a problem getting 1.99 with a credit union which in turn will make u a cash buyer at dealership and normally dealership have rebates for cash buyer. Refinancing I can say your interest will be higher then the 3% your paying now. If u know he won't take car from u it shouldn't be a problem.


+1

 

Sorry for the tough situation. I hope you are able to work this out in your favor either way.



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Message 3 of 5
StartingOver10
Moderator Emerita

Re: Refinancing to get a cosigner off a loan?

I don't think that refinacing will result in a higher interest rate for you.  Check into DCU (Digital Federal Credit Union) https://www.dcu.org/   their rates are very, very good for refi's. Less than what you are currently paying. 

 

 

Message 4 of 5
Anonymous
Not applicable

Re: Refinancing to get a cosigner off a loan?

Not only will you need a refinance, you'll need to transfer title and registration to yourself as well.  All of this will require the fiance's signatures and cooperation.

Right now, with him as the primary, the car is titled to him with a first lien to Honda Financial.  Other than being a guarantor (cosigner) on the note, you have no ownership of the vehicle.  For you to move with it to California and re-register it there, you will need to have your name on it.   It matters not who made the payments, it's whose name is on the paperwork as primary - that's the person the vehicle is titled to.

 

What you're technically looking to do is not really a refi in the strictest sense - you're actually trying to buy it from your cosigner, and that involves paying off Honda Financial so they will release the title to the new lender.  You'll also have to file a title transfer in Florida to get your name on it and his off.

 

The good news is, you have a good score and should have no trouble getting financing from a number of lenders.

Since title work is invovled beyond what would be required with a regular refi, you might actually want to consider going the trade-in route - assuming of course that your fiance will cooperate with going into the dealer to sign the title over.  Technically you are a first-time buyer, and you also have a Tier-1 credit score, so you should be able to get a good rate and some incentives for buying new (or used, even) with a dealer.  Then the dealer will unravel the title issues on the old car and title the new one to you alone - meaning you won't have to worry about making sure that gets done right, like you would if you decided to go the sort-of-refi route.

Message 5 of 5
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