How to Remove Cosigner from Car Title After Payoff?
When you take out a car loan, sometimes you need a cosigner to help you qualify. A cosigner is someone who agrees to take responsibility for the loan if you can’t make the payments. This is common for people with limited credit history or lower credit scores.
But what happens after you’ve paid off the loan? The process of removing the cosigner from the car title is simple. Read our blog for step-by-step assistance.
Step #1 – Pay Off the Loan Completely
Before you can remove a cosigner from the car title, you need to pay off the loan in full. This means making all the required payments on time until the balance is zero. Once the loan is paid off, the lender will release their lien on the vehicle.
A lien is a legal claim on the car that allows the lender to repossess it if you don’t make payments. When the lien is released, you’ll receive a document called a lien release or satisfaction of the lien.
Step #2 – Get the Lien Release Document
After paying off the loan, the next step is to get in touch with your lender for the lien release document. This important document proves that the loan has been paid in full and that the lender no longer has a claim on the car.
Some lenders will send this document without you asking for it, but others may require you to request it. Make sure to keep this document in a safe place, as you’ll need it for the next steps.
Step #3 – Check Your State’s Requirements
Each state has its own different rules for updating a car title. In most cases, you’ll have to visit your local Department of Motor Vehicles (DMV) or similar agency to remove the cosigner from the title.
Some states may ask for additional forms or fees, so it’s a good idea to check your state’s DMV website or call them to find out exactly what you need.
Step #4 – Fill Out the Necessary Forms
Once you know what your state requires, you’ll need to fill out the appropriate forms to update the car title. This usually involves filling out a title application or transfer form. You may also need to provide the lien release document, your current car title, and proof of identification.
If the cosigner is listed on the current title, they may need to sign the form as well to show they agree to be removed.
Step #5 – Submit the Forms and Pay the Fees
After filling out the forms, you’ll need to submit them to the DMV. You may be able to do this in person, by mail, or online, depending on your state’s rules. There is usually a fee to update the title, so be prepared to pay this when you submit your forms.
The fee amount varies by state, but it’s typically not very expensive.
Step #6 – Wait for the New Title
Once you submit the forms and pay the fee, the DMV will process your request. This can take a few days to a few weeks. When the new title is ready, it will be mailed to you. The new title should only have your name on it, showing that the cosigner has been successfully removed.
Step #7 – Keep All the Records
After receiving the new title, keep a copy of all the related documents, including the lien release, the old title, and the new title. Having these records can be really helpful if any issues come up in the future.
In a Nutshell
Removing a cosigner from a car title after paying off the loan is simple, but it requires some paperwork and a trip to the DMV.
At Advantage Finance Title Loans, we realize that managing car loans and titles can be confusing for a lot of people. That’s why we’re here to help. Whether you need a title loan or just have questions about the process, our team is ready to assist you.
Visit our website or call us at (281) 410-5337 to learn more about how we can simplify your car loan experience.