Removing a cosigner from a car loan can be risky and may not always be the best choice. But there are times when removing your cosigner could be beneficial—and even necessary. Before you make that decision, here are four things you should know:

It’s not always a wise move

Before you go ahead and remove your cosigner, it’s important to consider whether or not it would be a wise move. You may be able to refinance with a lender who won’t require a cosigner, you may be able to get a car loan without a cosigner, or you may even be able to get an unsecured personal loan without one. You should use a refinancing car loan calculator to figure out if this is the right move for you. As per the Lantern by SoFi’s professionals, “It also shows you how much you could potentially save on monthly payments and/or interest so you can decide if refinancing your car loan is worth it.”

If none of those options are possible for you now, then removing your cosigner may make sense—but only if it is done correctly.

You may be able to refinance with a lender who won’t require a cosigner

If you’ve been unable to find a lender who will refinance your car loan with a cosigner, you may be able to refinance with a different lender. Many auto dealerships and finance companies have relationships with lenders who don’t require cosigners. You can even find auto refinancing companies online that will work with you without a cosigner.

Before signing any loan paperwork, make sure that the lender has no hidden fees or penalties in case something goes wrong during the process. Also make sure that there are no prepayment penalties on the loan—this means if you pay off your car early, they can’t charge you more money than they would have if they hadn’t been paid early!

It could help your cosigner, too

If you’re removing your cosigner from the loan, it could help them as well. When you pay off the balance and remove their cosigner status, they’ll be able to refinance and get better interest rates on future loans. They may also be able to get more favorable terms if they choose to apply for a new loan.

In addition, if there’s any possibility that it will impact your credit score negatively (i.e., if you want to buy a house or car soon), then removing your name from this piece of paper can help keep your credit healthy by reducing its length and history of late payments or defaulting on payments altogether.

Don’t shortchange yourself when you remove the cosigner

Removing your cosigner from a loan can be a big deal. Before you make any decisions, consider the impact of your decision on both yourself and your cosigner. Consider the interest rate, fees, and other terms. You’ll want to look over all the details before removing a cosigner from a loan—including what will happen to the interest rate if you remove them or change anything else about the terms of your loan.

We’ve all heard the stories of people who were able to save their homes or buy cars using their cosigner. But with any loan, it’s important to understand all the terms and conditions before you apply. If you think removing a cosigner will help you get approved for a mortgage, be sure to check out our guide on removing a cosigner from a loan to make an informed decision and ask yourself if removing your cosigner is really worth it for you and your family.