Getting your name off a co-signed loan

It’s not easy to do, but you have several options through your bank

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From the December 2015 issue of the magazine.

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Q: We co-signed on a line of credit for our children so they could complete their post-secondary education. Now we’d like to know if there’s a way to remove our names from the loan, even if it’s not paid off?

—Allison Walsh, New Dundee, Ont.

A: Co-signing a line of credit or loan is a big responsibility. You are 100% responsible for repaying the debt and it can affect your own ability to borrow. Of course, there can be good reasons to co-sign, especially when it’s for your kids. But removing your name isn’t easy and you’ll need to talk to your bank about your specific case. Generally speaking, however, in order to remove your name from the loan your child would need to qualify for a new line of credit or loan based on his or her own income and credit history. Provided they are approved, you can transfer the balance over and close the existing account. If they don’t qualify, a new co-signer would have to be found. You didn’t mention why you wanted to remove your name. But if there happen to be withdrawals from the line of credit that you aren’t comfortable with, you may be able to suspend the loan, allowing deposits to be made but no withdrawals. You won’t win a popularity contest with that move. But it might be just the tough love required.

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