How to De-register Yourself from a Co-signed Loan

by Clare Louise | May 25, 2018 10:01 am

Banks insist on a co-signer whenever anyone applies for a Home Loan. It can be due to various reasons. You can be the co-owner of the property. Under such circumstances, you necessarily have to be the co-signer. Otherwise, you might be theprimarybreadwinner of the family. You might offer to be a co-signer to improve the eligibility criteria of the other co-signer.

Banks love to have a comfort zone while approving the Home Loan. It might have been part of the terms and conditions of the lenders to provide Best Home Loan Offers[1] to their customers. At that point of time, it might have been the only option available. However, do you know that offering your name as a co-signer is easy, but de-registering yourself from a co-signed loan is a cumbersome task?

What does the co-signing of a loan signify?

Co-signing a loan is a confirmation to the bank that you are willing to pay the loan instalment if the other person fails to do so. Remember, your liability exists even if the other co-signer files for bankruptcy or expires before paying the debt.

Would you like to remove your name from the co-signed debt? The bank will not do so until the other party exhibits its capability to handle the loan on their own. Is it possible? Usually, it does not happen this way. If it were so, the banks would not have asked you to be a co-signer in the first place. However, if there is an increase in the income levels and the repaying capacity of the other co-signer, banks do consider such requests from your side. It usually happens in student loans.

How do you remove your name from a co-signed loan?

Co-signing a loan is not an issue as long as the payments are in order. It becomes a significant issue only in case of default on the part of the co-borrower. However, you should check the loan status from time to time to ensure that the borrower is repaying the instalments. Otherwise, you not only end up with a significant liability you did not incur but also damage your credit score.

To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.

Also Read:  5 Things to Keep in Mind if You Are Planning to Purchase a Home[2]

 

Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.

 

Endnotes:
  1. Best Home Loan Offers: https://www.mymoneymantra.com/home-loan.html
  2. 5 Things to Keep in Mind if You Are Planning to Purchase a Home: https://www.mymoneymantra.com/blog/5-things-to-keep-in-mind-if-you-are-planning-to-purchase-a-home/

Source URL: http://betacash.org/how-to-de-register-yourself-from-a-co-signed-loan/