How to Refinance a Personal Loan

You can refinance a personal loan by taking out a new loan. Depending on the new interest rate, refinancing personal loans could save you money.

How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
Privacy Secured  |  Advertising Disclosures
 

Best personal loan refinancing in 2023

Written by Amanda Push and Alex Cook | Edited by Jessica Sain-Baird, Xiomara Martinez-White and Ismat Mangla
Reviewed November 27, 2023

How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
LenderUser ratingAPR rangeLoan amountLoan term
Best Egg logo
(2,421)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

8.99% to 35.99%$2,000 to $50,00036 to 60 months
Discover Personal Loans logo
(1,593)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

7.99% to 24.99%$5,000 to $40,00036 to 84 months
LendingPoint logo
(1,952)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

7.99% to 35.99%$2,000 to $36,50024 to 72 months
LightStream logo
(222)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

7.49% to 25.49% (with autopay)$5,000 to $100,00024 to 144 months
PenFed logo
(14)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

8.49% to 17.99%$600 to $50,00012 to 60 months
SoFi logo
(96)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

8.99% to 25.81% (with autopay)$5,000 to $100,00024 to 84 months
Upgrade logo
(2,153)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

8.49% to 35.99% (with autopay)$1,000 to $50,00024 to 84 months

Read more about how we chose our picks for best personal loans for refinancing.

Best Egg logo

  • APR: 8.99% to 35.99%
  • Loan amount: $2,000 to $50,000
  • Loan term: 36 to 60 months
  • Minimum credit score: 600
  • Origination fee: 0.99% - 8.99%
ProsCons

  Accessible to borrowers with lower credit scores

  Works with creditors directly for debt consolidation

  Offers options for secured loans with collateral

  Potentially high interest rate for fair credit borrowers

  Origination fee on all personal loans

  Relatively few loan term options

At a glance: Like other lenders, Best Egg reserves its best rates for borrowers with an excellent credit score and high annual income, but borrowers with fair credit may prequalify to see conditional rates.

Read our full Best Egg personal loan review.

Discover Personal Loans logo

  • APR: 7.99% to 24.99%
  • Loan amount: $5,000 to $40,000
  • Loan term: 36 to 84 months
  • Minimum credit score: 720
  • Origination fee: No origination fee
ProsCons

  Competitive range of potential APRs

  Low minimum income requirement of $25,000

  No origination fees

  Loans aren’t accessible for borrowers with lower credit scores

  Smaller maximum loan size than competitors

  Can only pay off unsecured debt and not secured loans

At a glance: Discover is a credit card company that also issues small personal loans; if you can qualify, the rates are competitive, and you could potentially agree to a longer loan term than some competitors offer.

Read our full Discover personal loan review.

LendingPoint logo

  • APR: 7.99% to 35.99%
  • Loan amount: $2,000 to $36,500
  • Loan term: 24 to 72 months
  • Minimum credit score: 660
  • Origination fee: 0.00% - 10.00%
ProsCons

  Low minimum interest rate can be attained by some borrowers

  Offers wider range of potential repayment terms

  Small minimum loan size for consolidating lower amounts of debt

  Some borrowers could have a high APR and fee

  Potential origination fee for certain borrowers

  Loans aren’t available in Nevada or West Virginia

At a glance: LendingPoint is transparent about the requirements you need to get a loan, and the lender works with fair credit borrowers — just watch out for the potential origination fee.

Read our LendingPoint personal loan review.

LightStream logo

  • APR: 7.49% to 25.49%* (with autopay)
  • Loan amount: $5,000 to $100,000**
  • Loan term: 24 to 144 months*
  • Minimum credit score: Not specified
  • Origination fee: No origination fee
ProsCons

  Competitive APR range with a low minimum and maximum

  Wide range of potential repayment terms and funding amounts

  No origination fees

  Only borrowers with good-to-excellent financial profiles are eligible

  LightStream doesn’t disclose specific eligibility criteria

  Prequalification with a soft credit check is not available

At a glance: While LightStream offers competitive rates and a high maximum loan size, many borrowers won’t be able to get approved for a loan due to the lender’s strict requirements.

Read our full LightStream personal loan review.

*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 5.99% APR with a term of 3 years would result in 36 monthly payments of $304.17. Truist Bank is an Equal Housing Lender. © 2023 Truist Financial Corporation. Truist, LightStream, and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.

**While LightStream offers loans up to $100,000, LendingTree marketplace customers will only find loan amounts up to $50,000.

PenFed logo

  • APR: 8.49% to 17.99%
  • Loan amount: $600 to $50,000
  • Loan term: 12 to 60 months
  • Minimum credit score: 700
  • Origination fee: None
ProsCons

  Competitive APR range with a low minimum and maximum

  Small minimum loan size for consolidating lower amounts of debt

  No origination fees

  Relatively high minimum credit score required

  Credit union membership required, which includes opening another account

  Unclear loan eligibility criteria

At a glance: As long as you meet the credit score minimum and you’re willing to become a member of PenFed Credit Union (which is easy to join), you could receive competitive loan terms.

Read our full PenFed Credit Union personal loan review.

SoFi logo

  • APR: 8.99% to 25.81% (with autopay)
  • Loan amount: $5,000 to $100,000*
  • Loan term: 24 to 84 months
  • Minimum credit score: 680
  • Origination fee: 0.00% - 6.00%
ProsCons

  Relatively low maximum APR for personal loans

  Wide range of potential repayment terms and funding amounts

  Allows joint applications on personal loans

  Relatively high minimum credit score required

  Minimum loan size is higher than most competitors

  Potential origination fees for some borrowers

At a glance: SoFi offers a strong personal loan product, with a low range of potential APRs, a high maximum loan amount and flexible terms — and you can prequalify to see if you’re eligible.

Read our full SoFi personal loan review.

*While SoFi Bank offers loans up to $100,000, LendingTree marketplace customers will only find loan amounts up to $50,000.

Upgrade logo

  • APR: 8.49% to 35.99% (with autopay)
  • Loan amount: $1,000 to $50,000
  • Loan term: 24 to 84 months
  • Minimum credit score: 580
  • Origination fee: 1.85% - 9.99%
ProsCons

  Accessible to borrowers with lower credit scores

  Works with creditors directly for debt consolidation

  Offers wider range of potential repayment terms

  Potentially high APR for fair credit borrowers

  Origination fee on all personal loans

  Unclear eligibility criteria for personal loans

At a glance: Upgrade offers fast funding for its personal loans, which are accessible to borrowers with lower credit scores — however, all loans come with an origination fee that’s taken from your deposit by the lender.

Read our full Upgrade personal loan review.

loading image

What is personal loan refinancing?

Refinancing is taking out new debt in order to pay off old debt. The new debt should have fewer fees and/or more favorable repayment terms to make refinancing worthwhile.

If you have a personal loan with a high interest rate or otherwise unfavorable terms, you can refinance it with a new personal loan that has better terms, like a lower APR or a longer repayment period. You may pay less interest over time, or reduce your monthly payment, by moving the debt into a new loan.

Can you refinance your personal loan with a new one from the same lender?

Yes, many lenders offer the option to refinance a personal loan — but it’s best to check in with your lender to be sure.

Note that even though you could refinance a personal loan multiple times, each instance of taking out a new loan can temporarily hurt your credit score. Generally, requirements for refinancing include maintaining good credit and qualifying with the lender.

How to refinance a personal loan

1. Decide if refinancing is right for you

Before refinancing a personal loan, calculate how much it’ll cost — it helps to use a personal loan calculator — and consider any potential fees. For example, if your existing loan has a prepayment penalty for paying it off early and your refinanced loan would require an origination fee, costs can add up quickly.

You’ll also want to review your credit to see if you’d likely qualify for a new personal loan with competitive terms. You can get your credit score for free with LendingTree, and you can also access free credit reports from each of the three major credit reporting agencies (Experian, Equifax and TransUnion) via AnnualCreditReport.com. Since credit report errors can hurt your credit score, it’s important to ensure that there aren’t any before comparing lenders.

2. Choose how you’d like to refinance your personal loan

There are two common ways to refinance your debt: personal loans and balance transfer cards.

Personal loans can offer larger borrowing limits than a credit card, so taking one out is a common technique for combining multiple debts at once. Personal loans also have a structured payment plan with a single, fixed payment each month.

On the other hand, balance transfer cards can come with special offers, like a zero-interest introductory period. These cards let you pay down your debt without incurring high interest costs, as long as you pay off the balance in full before the introductory period ends. If you don’t, you could be charged interest on your remaining balance and wind up deeper in debt than before.

3. Shop around for a rate

Once you’ve decided to refinance your loan, you’ll want to compare companies to see which has the most affordable option. Consider factors like the APR, fees, borrowing limits and repayment terms.

Make sure to watch out for origination fees, though. On a $5,000 personal loan, an origination fee of 5% would mean that $250 will be deducted from the deposit you receive from your lender.

If you decide to use a credit card, you’ll need to consider the typical 3% to 5% balance transfer fee. If you can pay off the balance transfer card during the introductory period, that fee may be worth it, but it will add to the debt in the short-term.

4. Prequalify and compare offers

When you prequalify for a loan or credit card, lenders quickly assess your creditworthiness based on a few factors, like your income and savings. They’ll often also conduct a soft credit inquiry, which doesn’t affect your credit score.

You should always prequalify for refinancing debt, as this gives you the opportunity to see what repayment terms you could receive and compare offers from different lenders.

You’ll also want to compare your offers to your existing debt and decide whether refinancing makes sense for you. Make sure you understand exactly how much your newly refinanced loan will cost you, including interest charges, origination fees, your estimated monthly payment and any other costs.

5. Choose a lender and formally apply

When you’ve chosen a loan or credit card, you’ll submit a formal application. This will trigger a hard credit inquiry, which will negatively impact your credit temporarily. Lenders often request supporting documentation, such as copies of tax returns, pay stubs and bank statements.

If you’re approved, your lender may offer to transfer funds to your bank account, mail you a paper check or pay your creditors directly. Once you receive the loan, pay off your original debt quickly to avoid additional costs. Consider calling your old lender to ask them for the exact payoff amount to avoid paying more than you should.

Lastly, you’ll want to follow up with your old creditor to confirm that your debt was paid in full. Request that they send you a statement in writing.

Pros and cons of refinancing a personal loan

ProsCons

  Lower interest rates: Depending on your credit and financial profile, the lender and market conditions, you could receive a lower rate.

  Favorable loan terms: You may be able to find a longer loan term with a lower monthly payment, or a shorter loan term with lower interest paid overall.

  Fixed interest rates: Switching from a variable interest rate debt to a fixed interest rate loan allows you to plan your budget around a fixed monthly payment.

  Additional fees: Taking out a new loan can come with added fees, like an origination fee. You may also be penalized for repaying your original loan early.

  Higher interest costs: If you’re struggling to make payments on your loan, you may find it helpful to refinance and get a lower monthly payment. However, extending your term could mean that you’ll pay more in interest over time.

  Need to qualify: If you’re struggling financially, qualifying for a new loan could be difficult.

How refinancing your personal loan can affect your credit

When applying for a new personal loan, lenders will often let you prequalify, which won’t impact your credit score. However, if you choose to proceed with the loan, you’ll be subject to a hard credit inquiry, which will temporarily put a slight dent in your credit score.

This may lower your chances of getting approved for new credit right after refinancing your personal loan. However, as you continue to pay down on your debt (and finally pay it off), your credit score will eventually bounce back.

Can you renegotiate your current personal loan instead of refinancing?

You can try. If you’re having trouble making loan payments, your lender may consider renegotiating your personal loan terms, especially if you’re in good standing with them. This process, called loan modification, essentially draws up a new contract to replace your old one.

When you ask to renegotiate a personal loan, you can request to lower your monthly payment, interest rate or principal balance, or a combination of the three. By making your loan more affordable for you, your lender hopes to reduce the chances of you defaulting on loan payments. However, lenders have no obligation to renegotiate your loan and may not consider it unless you can demonstrate some extenuating circumstances that prevent you from paying.

Modifying an existing loan usually doesn’t include fees, and you can put in multiple requests. However, each lender will have its own eligibility criteria when considering borrowers for loan modification, including meeting a minimum credit score and having a monthly income. Not everyone will qualify.

Similarly, you may be able to negotiate a lower interest rate on your credit card, especially on accounts you’ve had for several years. You can try to leverage your payment history and credit score.

Before speaking to your current lender, consider these tips:

  • Review your credit history and correct any potential issues beforehand to increase your chances for approval.
  • Discuss your loan modification options with your lender as soon as you expect financial issues, rather than after missing one or more payments. If you have a good relationship with your lender, they may be more likely to renegotiate your personal loan terms.
  • Expect to explain the reason for your request, your current income, how you plan on increasing your income in the near future, how much you can afford to pay every month and any existing financial obligations.

How we chose our picks for personal loan refinancing

To make our list, lenders must offer competitive annual percentage rates (APRs). From there, we prioritize lenders based on the following factors:

  • Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
  • Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

Frequently asked questions

If you’re considering refinancing your loan, you may want to wait until you can secure interest rates lower than your current rates. You may have to work on improving your credit score to achieve those lower rates.

Refinancing a personal loan might be a good idea if you need to lower your monthly payments or need the cash to pay down other debts. Conversely, if you can afford a higher monthly payment, refinancing for a shorter term may mean that you can reduce the total amount spent on interest and pay off your debt sooner. Before applying for a new loan, crunch the numbers to be sure that refinancing makes sense financially even after factoring in the associated fees.

Refinancing a personal loan may initially negatively impact your credit score, but your score could recover over time. Refinancing can help you to lower your interest rate and make it easier to pay off debt, which can ultimately help you improve your credit.

Yes — if you’re going through financial hardship and struggling to meet your minimum monthly payments, your personal loan lender may be willing to renegotiate the details of your loan with you. If you find yourself in that position, it’s best to contact your lender as soon as possible so that you can avoid missing payments.