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How Do I Remove Myself As Cosigner on a Loan
Tuesday, Sep 15, 2009
Question: I co-signed for a motorcycle in Jacksonville Florida over 12 months ago at a Harley Davidson dealership. In the contract the finance officer and me put in there that after 12 months my name would come off of said loan. All payments have been made on time in fact every two weeks. More than the amount of the payment is also sent. Never has been late either. We call Harley Davidson finance company they own it. Now they say that the finance officer should not have written that and it is not legal. That the laws of Nevada apply for the loan. Not Florida laws. I have the contract no were in the contract does it mention Nevada or laws of that state. They are refusing to take my name off as a co-signer. The original owner does not want to re-finance we got a good rate at 2.9% if we have to re-finance everyone even HD is at 9.9% we would lose. My engine just blew up so I want a new car but this loan is reflecting on my credit and everyone says I have to get that taken care of. I do not have any other bills, own my home for several years. I pay for everything in cash. I don't use credit cards.
My credit rating is good. How can I to get off as co-signer if the Harley people will not take me off even though I have it in writing they will?Answer: If I can paraphrase your facts, a motorcycle dealer in Florida wrote a contract to finance a motorcycle. You are a cosigner. All payments are being made in a timely manner, but you want out of the deal because of the impact on your credit rating or debt-to-income ratio. The Florida dealer wrote terms that, one year later, the Nevada finance company refuses to honor.
It would be unusual for a lender to write a clause in a loan agreement that would allow a cosigner to remove him or herself from an agreement, and I'm not surprised that the finance company would
It would be unusual for a lender to write a clause in a loan agreement that would allow a cosigner to remove him or herself from an agreement, and I'm not surprised that the finance company would
balk at this. Under normal circumstances, the only way you can extract yourself from this type of contract is for the other cosigner to refinance and put him or herself as the borrower. However, the Florida dealer wrote this clause into the contract, both parties signed it, and the Nevada finance company never raised this clause as an issue over the last year.
I recommend you and the cosigner to speak with an attorney in Florida with experience in consumer law to determine what your rights are under Florida law. My guess is that the Florida attorney will use a legal doctrine called "laches" to ask a Florida court to enforce the clause.
I hope this information helps you Find. Learn & Save.
Best,
Bill
www.bills.com/blog/
I recommend you and the cosigner to speak with an attorney in Florida with experience in consumer law to determine what your rights are under Florida law. My guess is that the Florida attorney will use a legal doctrine called "laches" to ask a Florida court to enforce the clause.
I hope this information helps you Find. Learn & Save.
Best,
Bill
www.bills.com/blog/
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1. Posted by Daniel Pierre on Friday 18th September 2009 14:19
HI, I bought a vehicle for my mother for her birthday 6 months ago. The veHicle was purchased through nissan financials at a 1.9% APR. I signed as the co-signer and her the primary borrower. Given her high credit rating of 760+, she most definately will qualify for refinancing at a financial institution. MY question is I want to remove myself as a co-signer to free up my credit to buy my first home. I have my car, 3 credit cards all paid off and not used, a motorcycle paid off, and her car on my credit. How do I remove myself off of the loan, although I'll still be paying for it. No banks will give her a 1.9% APR refinancing, the nissan wont budge.
2. Posted by Bill on Friday 18th September 2009 14:37
Let us look at the economics on a 1.9% APR. Even with the prime rate as low as it is today, it costs Nissan more than 1.9% to find and use funds it loans to its customers. The 1.9% APR is a money-loser for the financial department at Nissan, but on the other hand it promotes the sales of its vehicles. Either Nissan eats the cost of its 1.9% loans, or it boosts the price of its vehicles to compensate for the dirt-cheap interest rates it offers. The reason no bank or credit union matches Nissan's rate is that 1.9% is below the market price of a vehicle loan. There is no magic wand anyone can wave to extract you from the loan if Nissan does not want to rewrite its terms. You have three options: 1) Your co-signer refinances; 2) you sell the vehicle and pay the deficiency balance; 3) you and/or your co-signer pay-off the loan.
3. Posted by Ronny on Wednesday 30th September 2009 16:22
I got married three years ago, and since then got divorced. I co-signed for my ex-wife for a student loan in SC and need to know how to get off the loan. Any help would be great. Thanks
4. Posted by Bill on Thursday 1st October 2009 09:53
You need to take all of your documents relating to the divorce and the student loan either to the attorney who represented you in the divorce or one who is experienced with family law in your state. Generally speaking, co-signers on a loan are stuck with it until the balance is paid or the loan is refinanced. The divorce agreement may have obligated your ex-spouse to refinance the student loan. Also, there is a chance you may not be a co-signer at all. An attorney's time is not cheap, but in this situation it will be money well-spent to understand your rights and liabilities.