Contact the Lender
Contacting your lender to ask for the removal of your ex-wife from the loan is the simplest step to take. You can use your divorce decree as proof that you are no longer legally married. Providing any type of proof from the judge that grants the vehicle solely to you may help convince the lender to restructure the contract. However, the lender isn't obligated to remove a co-signer from an auto loan contract. The lender may require you to refinance the loan to remove your ex-wife's name.
Refinancing the Loan
Refinancing your car loan is often the most viable option for removing your ex-wife from the contract. This is similar to refinancing a home loan. It includes working with a finance company to create a new loan agreement. Your current lender may offer refinancing, but not all lenders do. Refinancing often depends on your credit history and your ability to make a down payment. If you made timely payments on your car loan and other credit accounts, the better chance you possess to receive a new loan.
Personal Loan
You can take out a personal loan at your bank or credit union to pay the vehicle loan in full. Your credit may also play a large role in whether the bank approves you for a personal loan. If you have a good relationship with your bank or credit union, you may be able to work out a loan with less than perfect credit. You should check your loan contract to verify no penalties will be assessed for paying off the loan early.
Making Payments or Selling
You can continue making payments on the loan while keeping your ex-wife as the co-signer. As the primary owner of the loan, you can control whether payments are made. Talk to your ex-wife to discuss this option. If possible, put something in writing that outlines the terms of your agreement. After the loan is fully paid, your ex-wife can sign the title over to you. Another option includes selling the vehicle and paying off the loan. Depending on your contract, your ex-wife may need to approve the sale.
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