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Personal Loans

Can You Refinance a Personal Loan?

Updated Jun 28, 2023   |   8-min read

Personal loans can be a great way to get cash quickly for various financial needs such as home improvement, car repairs, medical bills, and debt consolidation. A personal loan offers borrowers a lump sum of money that is repaid over a specific period of time, usually with lower interest rates than what they’d find with credit cards.

Borrowers with longer-term financial needs often prefer personal loans to credit cards because of these benefits. Sometimes, though, there may be a need to refinance personal loan debt to lower your interest rate, bring down your monthly payment, or even access additional funds.

The good news is that you can refinance a personal loan. Below, we show you what refinancing does, how it works, the lenders that offer personal loan refinancing as an option, and the benefits and risks involved in the process.

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How to Refinance a Personal Loan

When you refinance a personal loan, you are paying off the balance of your existing loan with proceeds from a new loan. This results in a single loan that, hopefully, saves you money with a better rate or better loan terms — or both.

Here’s what you need to know about refinancing a personal loan and how the process works. Remember, you’ll need a solid credit history and steady income to qualify for the best rates.

Shop Around for the Best Lender

You can refinance your personal loan with your current lender in some cases, or you may need to find a new lender that offers personal loan refinancing. Before you apply, it is important to shop around with various lenders to make sure you’re getting the best deal in terms of the interest rate, loan terms, and monthly payment amount.

>> Read More: Best personal loan companies

Calculate the Costs of Refinancing

Once you have narrowed down your options to the best potential lenders, use a personal loan calculator your refinancing costs, which may include things like application fees, origination or funding fees, and loan processing fees. You should also find out if your current lender imposes prepayment penalties.

You’ll want to weigh the upfront cost of refinancing against any potential savings you may gain with a new loan. If the closing costs are too high, it may negate the lower monthly payments or other benefits you’re looking for with a refinanced personal loan.

Make Sure Your Old Loans are Paid Off

You also want to pay close attention to how your existing loan is repaid. Before you even start the process of refinancing, you need to make sure there are no prepayment fees or penalties associated with paying off your original loan early.

You may be given the option of letting your new lender automatically transfer the funds to repay your existing loan versus receiving the funds directly. In either scenario, you should contact your existing lender to verify the old loan has a zero balance.

Lenders That Will Allow You to Refinance a Personal Loan


  • Rates (APR): 7.99% – 25.49%
  • Loan Amounts: $5,000 – $100,000
  • Credit Score: 660+

LightStream is an online-only lender that offers a wide variety of personal loans. The lender has low rates and no fees. If you have excellent or good credit, LightStream is a great option.

Loan proceeds may not be used to refinance an existing loan with LightStream.

  • Credit score category: Excellent, good
  • Soft credit pull to check rates: Not available
  • Deposit time: As soon as the same day
  • Origination fee: 0%
  • Late fee: None
  • Discounts: 0.50% interest rate reduction for enrolling in autopay
  • Repayment terms: 24 – 144 months**


  • Rates (APR): 8.49% – 35.99%
  • Loan Amounts: $1,000 – $50,000
  • Credit Score: 580+

Upgrade is a personal loan lender that offers personal loan refinancing to current borrowers. Given the fees associated with this lender, you’ll need to consider whether refinancing with them is cost-effective in the long run. You can check rates without affecting your credit score and eligibility is based more on free cash flow as compared to other lenders.

  • Credit score category: Fair, bad
  • Soft credit pull to check rates: Yes
  • Deposit time: As soon as the next day
  • Origination fee: 2.9% – 8%
  • Late fee: $10
  • Repayment terms: 36 or 60 months


  • Rates (APR): 6.12% – 35.99%
  • Loan Amounts: $1,000 – $50,000
  • Credit Score: 580+

Upstart is an online lending platform that partners with banks to provide personal loans that can be used for almost anything. Upstart’s lending model considers education, employment, and other variables when determining eligibility.3 This model leads to 27% more approvals and 16% lower rates than traditional models.4

  • Credit score category: Fair, bad
  • Soft credit pull to check rates: Yes
  • Deposit time: As fast as one business day
  • Origination fee: 0% – 8%
  • Late fee: $15 or 5% of payment
  • Repayment terms: 36 or 60 months

When You Should Refinance a Personal Loan

As long as the cost of refinancing is not greater than the potential savings, it may be a smart move to refinance your personal loan, especially if interest rates have fallen or your credit score has improved significantly since you first borrowed.

You may be able to get a shorter repayment term on your new loan so you can pay off the balance earlier; although it will increase the total interest you pay over time, opting for a longer loan term to lower your monthly payments is another potential benefit.

If your personal loan has a variable rate, you may want to refinance to a personal loan with a fixed interest rate instead. This takes away some of the uncertainty that comes with market interest rate increases and the potential of higher monthly payments that could stretch your budget. Switching to a fixed-rate loan can help borrowers gain predictability with their loan payments moving forward.

When You Shouldn’t Refinance a Personal Loan

Unfortunately, refinancing is not always free. Some lenders charge origination and processing fees, application fees, and other fees that can equal as much as 8% of the loan amount. This eats away at any savings you may receive with a lower rate. Before refinancing your personal loan, carefully consider the total costs relative to your potential savings.

Final Thoughts

A personal loan is a smart alternative to a credit card if you need cash for an expense you can’t afford to pay outright. Once you have a personal loan, you can refinance the loan in order to take advantage of lower interest rates or lower payments.

Be sure to consider your potential monthly savings or other changes to your loan terms — as well as any fees associated with the new loan — before deciding whether refinancing your personal loan makes sense for you.

Check out our page to learn more about how personal loans work.

*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 5.95% APR with a term of three years would result in 36 monthly payments of $303.99.

1The 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 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.

2Your 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.

3Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.

4Approval numbers compare the 2020 loan approval rate by the Upstart model and a hypothetical traditional credit decision model. The APR calculation compares the two models based on the average APR offered to borrowers up to the same approval rate. The hypothetical traditional model used in Upstart’s analyses was developed in connection with the CFPB No Action Letter access-to-credit testing program, is trained on Upstart platform data, uses logistic regression and considers traditional application and credit file variables.el).