Some private lenders offer an option for a cosigner release. This means that eventually, once specific requirements are met, a cosigner can be released from their obligation to repay the loan. Often a lender will require a set number of consecutive on-time payments (such as one, two, three or four years) before it will allow a cosigner release. Lenders also check the borrower’s credit before approving the cosigner release, making sure the borrower could qualify for the loan on their own without a cosigner. So, the borrower will need good credit and steady income, not just a good payment history.
Even if a lender offers a cosigner release, there isn’t a guarantee that the borrower will qualify for cosigner release. Most don’t. Cosigners should assume they’ll be cosigners for the life of the loan rather than counting on a cosigner release partway through the loan term.