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If you have a personal loan, you might wonder whether you can refinance it. For example, maybe you want to get a lower interest rate, reduce your monthly payment, or change your repayment term.
Here’s what you should know about refinancing personal loans:
- Can you refinance a personal loan?
- Lenders that offer personal loan refinancing
- When should you refinance a personal loan?
- How to refinance a personal loan
- Does personal loan refinancing affect your credit score?
Can you refinance a personal loan?
Yes, you can refinance a personal loan. To refinance a personal loan, you’ll simply take out a new personal loan to pay off the old one — which means you’ll have both a new rate and repayment term.
Here are a few reasons why you might want to refinance a personal loan:
- Lower your interest rate: Depending on your credit, you might qualify for a lower interest rate through refinancing — which will help you save money on interest charges and potentially pay off the loan more quickly.
- Reduce your monthly payments: If you opt for a longer repayment term through refinancing, you could lower your monthly payments. Just keep in mind that choosing a longer repayment term means you’ll pay more in interest over time.
- Consolidate multiple types of debt: You can use a personal loan for almost any personal expense. For example, if you take out a personal loan for debt consolidation or credit card consolidation, you could also use it to consolidate your old personal loan.
Although there are potential benefits that come with refinancing your personal loan, there are also some important potential drawbacks to consider. Here are a few to keep in mind:
- Might pay more in interest: If you choose a longer repayment term, you could end up paying much more in interest over the life of the loan.
- Origination fees: Many personal loan lenders charge origination fees — sometimes as high as 8% or more, depending on the lender. These fees are deducted before the loan is disbursed to you, reducing the amount of money you actually get.
- Prepayment penalties: Some lenders charge prepayment penalties if you pay off the loan before the stated term. If the lender of your original loan charges this type of penalty, it could reduce your potential refinancing savings.
If you’re thinking about refinancing a personal loan, be sure to consider how much the new loan will cost you over time and if the possible savings are worth it. You can estimate how much you’ll pay for a new loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Lenders that offer personal loan refinancing
Before you refinance your personal loan, it’s important to carefully consider your lender options to find the right loan for you.
Here are Credible’s partner lenders that offer personal loan refinancing:
|Lender||Fixed rates||Loan amounts||Loan terms (years)|
|9.95% - 35.99% APR||$2,000 to $35,000**||2, 3, 4, 5*|
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.
**Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33.
|6.79% - 17.99% APR||$5,000 to $35,000||1, 2, 3, 4, 5|
|5.99% - 29.99% APR||$5,000 to $35,000||2, 3, 4, 5|
|6.99% - 24.99% APR||$2,500 to $35,000||3, 4, 5, 6, 7|
|7.99% - 29.99% APR||$10,000 to $35,000||2, 3, 4, 5|
|10.68% - 35.89% APR||$1,000 to $40,000||3, 5|
†Based on a majority of borrowers from LendingClub's marketing partners who were issued loans between 1/1/19-12/13/19. The time it takes for your loan to be funded may vary.
|15.49% - 35.99% APR||$2,000 to $25,000||2, 3, 4|
|2.49% - 19.99% APR||$5,000 to $100,000||2, 3, 4, 5, 6, 7
(up to 12 years for home improvement loans)
|6.99% - 19.99% APR1||$3,500 to $40,0002||3, 4, 5, 6, 7|
1Rate reduction of 0.25% when enrolled in autopay.
2You may be required to have some of your funds sent directly to pay off outstanding unsecured debt.
3After making 12 or more consecutive monthly payments, you can defer one payment as long as you have made all your prior payments in full and on time. Marcus will waive any interest incurred during the deferral and extend your loan by one month (you will pay interest during this extra month). Your payments resume as usual after your deferral. Advance notice is required. See loan agreement for details.
4Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose and our evaluation of your creditworthiness. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.
|18.00% - 35.99% APR||$1,500 to $20,000||2, 3, 4, 5|
|5.99% - 17.99% APR||$600 to $35,000 |
(depending on loan term)
|1, 2, 3, 4, 5|
|6.95% - 35.99% APR||$2,000 to $40,000||3, 5|
|5.99% - 18.83% APR||$5,000 to $100,000||2, 3, 4, 5, 6, 7|
|10.97% - 35.93% APR7||$1,000 to $50,000||3 to 5 years 8|
7Personal loans made through Universal Credit feature APRs of 10.97%-35.93%. All personal loans have a 4.25% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Information on Universal Credit’s lending partners can be found at https://www.universal-.credit.com/landing/lendingpartners
9Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds sent directly to you should be available within four (4) business days. Funds sent directly to pay off your creditors may take up to two (2) weeks to clear, depending on the creditor.
|5.94% - 35.97% APR||$1,000 to $50,000||3, 5|
|8.27% - 35.99% APR4||$1,000 to $50,0005||3 to 5 years4|
4The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 24.4% and 36 monthly payments of $36 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
5This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers received are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the www.upstart.com website.
Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.
6If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.
If you have poor or fair credit, Avant might be a good choice for personal loan refinancing. You can borrow $2,000 to $35,000* with terms ranging from two to five years.**
Keep in mind that if you choose to refinance an existing Avant loan, you can only do so twice. If you want to refinance again after that, you’ll need to consider another lender.
With Axos Bank, you can borrow $5,000 to $35,000 with a term from one to five years. If you’re approved, you could have your funds as soon as the next business day.
Keep in mind that you’ll generally need very good to excellent credit to qualify for a personal loan from Axos Bank.
Best Egg personal loans range from $5,000 to $50,000 with repayment terms of two or five years.
In addition to your credit score, Best Egg also considers other proprietary credit attributes as well as your digital footprint — which means you might have an easier time qualifying even if you have less-than-perfect credit.
If you’re looking for a long-term personal loan, Discover might be a good option — you can borrow $2,500 to $35,000 with a repayment term of three to seven years.
Just remember that choosing a longer term means you’ll pay more in interest over time.
FreedomPlus offers personal loans from $7,500 to $50,000 with terms ranging from two to five years. If you’re approved, you could get your funds in as little as two business days.
LendingClub is one of the few lenders that allow cosigners on personal loans — which could make it a good choice if you need a cosigner to qualify for refinancing. With LendingClub, you can borrow $1,000 to $40,000 with a repayment term of three or five years.
LendingPoint specializes in working with borrowers who have near-prime credit scores — typically meaning a credit score in the upper 500s or 600s. With LendingPoint, you can borrow $2,000 to $25,000 with a term ranging from two to five years.
LightStream personal loans are available for $5,000 to $100,000, which could make it a good choice if you have a large loan to refinance or want to consolidate other debts along with your original loan.
Keep in mind that while LightStream doesn’t allow borrowers to refinance existing LightStream loans, you can use loan proceeds to refinance a loan from another lender.
Personal loans from Marcus range from $3,500 to $40,0002 and come with terms ranging from three to six years. Additionally, if you make 12 on-time, consecutive payments on your loan, you can defer one payment interest-free.
Unlike many personal loan lenders, OneMain Financial doesn’t require a minimum credit score, which could make it a good choice for borrowers with less-than-stellar credit.
Loans from OneMain Financial range from $1,500 to $20,000 — though keep in mind that you might have to provide collateral for higher loan amounts.
If you only need to borrow a small amount, PenFed might be a smart choice — you can borrow as little as $600 up to $35,000 with a repayment term from one to five years. Approved PenFed loans are typically funded within two to four business days after verification.
Prosper loans are available from $2,000 to $40,000 and come with repayment terms of three or five years.
Keep in mind that because Prosper operates a peer-to-peer online loan marketplace where investors pick and choose the loans they want to fund, the funding time for a Prosper loan can be somewhat longer than other lenders. For approved loans, the entire process usually takes three to five business days from start to origination.
With SoFi, you can borrow $5,000 to $100,000 with repayment terms ranging from two to seven years. If you take out a personal loan with SoFi, you’ll have access to several borrower perks, including unemployment protection and career coaching.
Universal Credit offers personal loans from $1,000 to $50,000 with flexible repayment terms of three to five years. With fast funding and personalized recommendations to help you build your credit, a personal loan through Universal credit would be ideal for borrowers whose current scores need improvement.
Personal loans from Upgrade range from $1,000 to $50,000 and come with repayment terms of three or five years. Upgrade also offers free credit monitoring and educational resources, which could help borrowers build their credit.
In addition to your credit score, Upstart will also consider your education and job history to determine your creditworthiness — this means you might qualify even if you have little to no credit. You can borrow $1,000 to $50,0005 with Upstart.
Check Out: Personal Loan Lenders That Accept Cosigners
When should you refinance a personal loan?
While refinancing a personal loan might be a good choice in some cases, it isn’t right for everyone. Here are a few situations where personal loan refinancing could be a smart move:
- Your credit score has improved. If you have a better credit score than when you originally applied, you might qualify for a lower interest rate. This could help you save money on interest and possibly pay off the loan sooner.
- You need to lower your monthly payment. If you refinance and choose a longer repayment term, you could reduce your monthly payments and lessen the strain on your budget.
- You want to switch to a fixed interest rate: A variable interest rate can fluctuate with market trends, which means your rate might go up in the future. With refinancing, you can switch to a fixed interest rate, which will stay the same over the life of the loan.
And here are some scenarios where refinancing might not be a good idea:
- You don’t qualify for better terms. If you can’t qualify for a lower rate or more favorable terms, then refinancing likely isn’t worth it.
- Origination fees outweigh your savings. Depending on the lender, origination fees can be as high as 8% or more. If these fees will eat up the savings you get through refinancing, then it might not be a good idea.
- You are about to buy a house or finance another purchase. Taking out a new personal loan can have a slightly negative impact on your credit score, though it’s usually only temporary. However, if you’re planning to apply for a mortgage, auto loan, or another type of financing, then it’s likely better to wait to refinance a personal loan until later so there’s no effect on your credit score.
Learn More: Bad Credit Personal Loans
How to refinance a personal loan
If you’re ready to refinance a personal loan, follow these four steps:
- Compare lenders and choose your loan option. Be sure to compare as many personal loan lenders as possible to find the right loan for you. Consider interest rates, repayment terms, fees, and any restrictions the lender might have on refinancing personal loans. After comparing lenders, pick the loan that works best for your needs.
- Complete the application. Once you’ve chosen a lender, you’ll need to fill out a full application and submit any required documentation, such as tax returns or pay stubs.
- Get your funds. The time to fund on a personal loan is typically about one week — though some lenders will fund loans as soon as the same or next business day after approval. Make sure to keep up with payments on your old loan while you wait for your funds.
- Pay off your old loan. Once you have your new loan funds, you can pay off your original loan. Contact your original lender to determine how to do this, then follow their instructions. Afterward, ask your original letter for documentation showing the loan has been paid off. You can also keep an eye on your credit report to make sure the loan shows as being paid — though keep in mind that it might take up to 30 to 45 days for the new status to show up on your credit report.
Does personal loan refinancing affect your credit score?
When you apply for personal loan refinancing, the lender will perform a hard credit check to determine your creditworthiness, which might cause a slight dip in your credit score.
However, this impact is usually only temporary, and your score will likely bounce back within a few months.
If you decide to get a personal loan for refinancing, remember to consider as many lenders as you can to find a loan that suits your needs. Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.99-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.