Can I remove a co-signer from a personal loan?

Why co-signer release is rare for personal loans: Unlike student loans - where some lenders offer co-signer release after 24-36 on-time payments - personal loan terms rarely include this provision. The co-signer's commitment usually runs for the life of the loan.

Co-signer release policies by lender: A small number of lenders (some credit unions, Discover) do offer co-signer release after a period of on-time payments. Check your original loan agreement for a co-signer release clause. If there is none, the lender is not required to release the co-signer.

Refinancing to remove a co-signer: (1) Wait until you have made 12-24 months of on-time payments, improving your credit score. (2) Check your credit score - you will need it to qualify alone. (3) Apply for a new personal loan in only your name, using proceeds to pay off the co-signed loan. (4) The original co-signed loan is paid off, the co-signer's obligation ends.

Credit impact on the co-signer: While the loan is active, it appears on the co-signer's credit report and affects their DTI and credit score - for better (on-time payments help them) or worse (late payments hurt them). This is why co-signers often want to be released.

If you cannot refinance yet: Make every payment on time. Keep the co-signer informed of the account status. Work on improving your credit so you can refinance as soon as possible.