How To Remove Yourself As A Cosigner On A Loan

If you want to know how to remove yourself as a cosigner, the short answer is that the lender has to agree to release you, or the loan has to be refinanced, paid off or transferred. You can't take your name off a cosigned loan on your own. This is true whether it's a personal loan, a car loan or another loan secured with collateral.

Maybe you regret cosigning a loan, or you want the facts before you agree to cosign. Either way, it helps to understand the risks that come with this role, including whether you can get your name off the loan later.

Can You Remove Your Name From A Cosigned Loan?

Yes, but only if the lender agrees or the loan is replaced or repaid. By cosigning a loan, you're contractually agreeing to take over someone's payments if they can't afford them. That can make it tough to get out of your contract, especially if the original borrower has a large unpaid balance. There's no set procedure to get removed as a loan cosigner. It's up to the lender.

Whether they're a bank or private company, most lenders won't let you off the hook until they're sure the primary borrower can handle the payments alone. To get the lender to remove you as a cosigner, the primary borrower will have to prove their finances are strong enough to cover their payments on their own.

How To Remove Yourself As A Cosigner

You can remove yourself as a cosigner by getting the lender's release, having the borrower refinance, selling the financed asset, paying off the loan or finding a replacement cosigner. Here's how each option works.

Refinancing The Loan

If you want to remove yourself as a cosigner, you can ask the borrower to refinance their loan in their name only. When they refinance, they can change the terms of the loan agreement, including removing the cosigner and possibly even reducing their interest rate.

Refinancing takes your name off the loan, and if the primary borrower qualifies, it can also lower their payments or rate. It works for most types of loans and is often the best option for loans with large balances.

The catch is that the primary borrower has to qualify for the new loan on their own, without a cosigner. That usually means they need fairly strong credit and income, which may not be the case if they've fallen behind on payments.

Learn more: How To Refinance A Personal Loan

Ask The Lender To Remove You As A Cosigner

If you want to remove yourself as a cosigner before the loan has been fully paid off, you can try asking the lender to remove you. Some lenders may be willing to do so if the primary borrower can show that they can handle the loan on their own. Here's how to ask:

The primary borrower can help strengthen their credit and finances with the following:

• Improve Credit: The borrower can keep making their bill payments on time, keep their credit card use low and avoid applying for new credit for a while to help build their credit.
• Pay Off Other Debts: If the borrower pays down their debt, it'll lower their debt-to-income ratio, which may make the lender more willing to remove you as a cosigner.

Sell The Financed Asset

When the loan is secured against an asset, like a house or car, the borrower could try selling it to repay their debt. Once the loan is fully repaid, the cosigner is off the hook.

The downside is that the primary borrower loses the car, house or other asset. Selling is a direct way to get you off the contract, but it could leave the borrower in a hard spot if they still need what they bought.

It can make sense if the primary borrower can no longer keep up with the payments. Just don't be surprised if they push back on this option.

Pay Off The Loan Faster

If you want to be removed as a cosigner for personal financial reasons, you can ask the primary borrower if there's some way they could pay off the loan faster. This may be through lump-sum payments, more frequent payments or higher payments.

However, this may be hard to do if there's a large balance remaining, especially if they are close to default.

Close The Account

If the borrower hasn't been able to make payments for a while and hasn't improved their credit rating enough to refinance the loan into a more affordable payment plan, it may be time to close the account.

Secured Loan

If it's a secured loan, consider the following options:

• Selling The Asset: You can speak to the lender about selling the asset and using the money from the sale to pay off the loan. That way, you can close the account and remove your name as cosigner.
• Loan Assumption: Alternatively, the buyer may take over the loan, as long as the lender approves. Also called a "loan assumption" or "loan transfer," this option takes your name off the loan once the transfer is complete. Keep in mind that this depends on lender approval and the buyer's creditworthiness.
• Voluntary Repossession: In this case, the borrower would willingly give the asset back to the lender to avoid the harsher consequences of an involuntary repossession. While voluntarily surrendering an asset, like a car, can still hurt the borrower's credit, it can help avoid the costs of having an asset seized or damaging their relationship with the lender.

Unsecured Loan

An unsecured loan has no asset to sell, so the only way to close it is to pay off the balance in full. Usually, that means the primary borrower pays it off with savings or moves the balance to a new loan in their own name. You stay on the account until the balance reaches $0.

Find A New Cosigner

You can also ask the primary borrower if someone can replace you as a cosigner. If they do, they'll have to refinance the loan with the new cosigner. Finding a cosigner who's more comfortable taking over another person's loan payments when necessary may be the easiest solution for the borrower.

Can The Primary Borrower Remove You As A Cosigner?

No, the original borrower can't simply take your name off their loan contract. The lender has to agree, which usually means the borrower pays off the loan or refinances it in their own name.

What Happens If You Can't Remove Yourself As A Cosigner?

If you can't be removed, you stay responsible for the loan until it's paid off. If your lender won't let you or the borrower out of the loan contract, look into the following options to remove yourself as cosigner:

• The primary borrower refinancing the loan by themselves
• The primary borrower finding a new cosigner
• Selling the financed asset
• Transferring the loan to someone else
• Paying off the loan
• Closing the account

If none of these options work, you'll have to work with the primary borrower to keep the account in good standing. While it can be expensive and inconvenient, it's better than letting the loan payments pile up until they hurt both your bank accounts and credit scores. This is the main risk with cosigning any loan.

Learn more: Should You Cosign A Loan? The Good And The Bad

How To Remove A Cosigner From A Car Loan

To get off a cosigned car loan, the borrower usually has to refinance the loan in their own name, or the car has to be sold and the loan paid off. The lender can also agree to release you, but they don't have to.

• Refinance In The Borrower's Name: The borrower applies for a new car loan on their own and uses it to pay off the old one. This is the most common route, but they'll need the credit and income to qualify alone.
• Sell Or Trade In The Car: If the sale covers the balance, the loan is closed and your name comes off with it. If the car is worth less than what's owed, someone has to pay the difference.
• Ask For A Release: Call the lender and ask if they'll remove you once the borrower has a record of on-time payments. Get any release in writing.

What Happens To A Cosigner If The Borrower Goes Bankrupt?

If the borrower goes bankrupt, you're usually still responsible for the loan. Under Canada's Bankruptcy and Insolvency Act, the borrower's discharge does not release anyone who was jointly bound with them or acted as a surety for them, which includes most cosigners and guarantors.

This happens more often than you might think. Canadians filed 37,523 consumer insolvencies in the second quarter of 2026, up 6.9% from the same quarter in 2025¹. Consumer insolvencies include both bankruptcies and consumer proposals.

The same goes for a consumer proposal. The borrower makes a deal to repay part of what they owe, but the Act says accepting a proposal doesn't release anyone who wouldn't be released by a discharge. That means the lender can still come to you for the rest. A Licensed Insolvency Trustee can explain how it affects your share of the debt.

Does Cosigning Affect Your Credit?

Yes. Your credit score may be either positively or negatively affected if you're a cosigner, depending on how the primary borrower handles the loan.

Can Cosigning A Loan Negatively Affect Your Credit?

Being a cosigner on a loan can have a negative effect on your credit score for the following reasons:

• Hard Credit Check: When the lender does a hard credit inquiry during the loan application, this can cause your credit score to dip.
• Late Or Missed Payments: If the primary borrower misses a payment, the late payment may be reported to the credit bureaus, Equifax and TransUnion. If this happens, it may be recorded on your credit report and can pull your credit score down too.
• Asset Repossession: If the loan is secured by an asset, such as a car or house, the asset may be seized by the lender if the primary borrower defaults. Again, this may be noted on your credit report and can drag your credit score down.
• Account In Collections: If the primary borrower misses several loan payments, the lender may involve a collection agency to go after the missed payments. If you're a cosigner on the loan, a collection account may also be opened on your credit report, which can hurt your credit score.

Can Cosigning A Loan Help Improve Your Credit?

Yes, your credit score can also be positively affected as a cosigner if the loan is kept in good standing. That means payments must be made on time every month. Timely payments are reported to the credit bureaus and will show up on your credit report.

When Is A Cosigner Needed?

Cosigners are usually required when the person applying for the loan:

• Has a poor or no credit history
• Has a low credit score
• Doesn't have the minimum income required
• Is unemployed
• Is self-employed
• Is a student with little credit history

Most of these situations are a higher risk for the lender. A cosigner takes away part of that risk and increases the chance of approval. The cosigner becomes responsible for any payments that are not made. See the types of loans you can get with a cosigner.

Additional Reading

How To Get A Guarantor Loan In Canada

Cosigning On A Mortgage: Things You Need To Know

What Is A Guarantor Loan In Canada?

Final Thoughts

It may be possible to remove your name as a cosigner, but it can be difficult if the lender won't release you without the borrower refinancing or repaying the loan. Being a cosigner carries real risk, so it's best to cosign only for someone you know well and trust to pay. If the loan isn't paid, you could lose money and your credit may be affected. Even when you want to help someone, it's okay to put your own financial needs first.

How To Remove Yourself As A Cosigner FAQs

_Sources

1. Canadian Association of Insolvency and Restructuring Professionals, "Q2 2026 Canadian Insolvency Statistics" (Office of the Superintendent of Bankruptcy data), cairp.ca, August 14, 2026.