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If you have a high-interest personal loan, refinancing can save you money every month. This guide explains how personal loan refinancing works, when it makes sense, and how to find the best lenders in 2026.
What Is Personal Loan Refinancing?
Personal loan refinancing means taking out a new personal loan to pay off your current one. The goal is to get a lower interest rate, a lower monthly payment, or both.
The new loan has new terms: a different interest rate, loan amount, and repayment period. You use the new loan funds to pay off the old loan, then make payments on the new one.
When Does It Make Sense to Refinance?
Your Credit Score Improved
If your score was low when you got the original loan, you likely paid a high rate. After building better credit history, you may now qualify for a much lower rate. Even a few points of improvement can make a big difference.
You Can Get a Lower Rate
If overall interest rates have dropped or you simply find a lender offering a better rate, refinancing can reduce how much interest you pay over time.
You Need a Lower Monthly Payment
Extending the repayment term lowers your monthly payment. This can help if cash flow is tight. Just remember that a longer term means more interest paid overall.
You Want to Get Out of High-Interest Debt Faster
You can refinance into a shorter term to pay off your loan faster. Your monthly payment will be higher, but you pay less total interest.
Requirements to Refinance a Personal Loan
Lenders look at several factors:
- Credit score: Most lenders want 600+. The best rates go to borrowers with 720 or higher.
- Income: Stable income shows you can repay. Lenders verify this with pay stubs or tax returns.
- Debt-to-income ratio (DTI): Most lenders prefer a DTI below 40%.
- Loan purpose: Some lenders restrict what you can refinance into — always check the terms.
- Existing account history: A track record of on-time payments on the original loan helps your case.
Best Lenders for Personal Loan Refinancing in 2026
SoFi
SoFi is a top choice for borrowers with good credit. They offer no fees, competitive rates, and flexible terms. Rates typically start around 8.99% APR. Check our SoFi personal loan review for full details.
LightStream
LightStream offers some of the lowest personal loan rates available, with rates starting around 7.49% APR for well-qualified borrowers. No fees, no prepayment penalties.
Marcus by Goldman Sachs
Marcus has no origination fees and competitive rates. They are a solid option for refinancing with good credit. Read the full Marcus personal loan review for details.
LendingClub
LendingClub works with a range of credit profiles. They charge an origination fee but can be a good option if other lenders turn you down. See our LendingClub review for current rates.
Avant
Avant is designed for borrowers with fair to good credit, typically 580 to 700. Rates are higher than SoFi or LightStream, but Avant accepts applicants others reject. See our Avant review for more.
Comparison Table: Personal Loan Refinancing Lenders
| Lender | APR Range | Min Credit Score | Origination Fee | Loan Amounts |
|---|---|---|---|---|
| SoFi | 8.99% – 29.49% | 680 | None | $5,000 – $100,000 |
| LightStream | 7.49% – 25.49% | 660 | None | $5,000 – $100,000 |
| Marcus | 6.99% – 24.99% | 660 | None | $3,500 – $40,000 |
| LendingClub | 9.57% – 35.99% | 600 | 3% – 8% | $1,000 – $40,000 |
| Avant | 9.95% – 35.99% | 580 | Up to 4.75% | $2,000 – $35,000 |
How to Refinance a Personal Loan: Step by Step
- Get your current loan details: Note your balance, current rate, remaining term, and payoff amount.
- Check your credit score: Free options include Credit Karma, Experian, and your bank’s credit monitoring.
- Pre-qualify with multiple lenders: Most lenders let you check rates with a soft credit pull that does not affect your score.
- Compare offers: Look at APR (not just rate), fees, loan term, and total cost.
- Apply formally: Submit your full application with the chosen lender.
- Use the funds to pay off the old loan: Some lenders send the funds directly to your old lender. Others deposit into your account and you pay it off yourself.
- Confirm payoff: Make sure the old loan is marked paid in full.
Things to Watch Out For
- Prepayment penalties: Some loans charge a fee if you pay them off early. Check your current loan agreement before refinancing.
- Origination fees: These can add up. A $1,000 fee on a $10,000 loan is 10% of the principal — factor this into your savings calculation.
- Extending your term: A lower payment is nice, but more months means more interest. Do the math on total cost, not just monthly payment.
How Much Can Refinancing Save You?
Example:
- Current loan: $15,000 at 22% APR, 36 months remaining
- Monthly payment: $570
- Total interest remaining: $5,520
After refinancing:
- New loan: $15,000 at 11% APR, 36 months
- Monthly payment: $491
- Total interest: $2,676
- Savings: $2,844 over 3 years
For a broader look at personal loan options, see our roundup of the best personal loans of 2026.
If you are carrying multiple high-interest debts, a debt consolidation loan could be a smarter move than refinancing a single loan.
Frequently Asked Questions
Can I refinance a personal loan with the same lender?
Sometimes yes, sometimes no. Some lenders allow it, especially if you have been a good customer. But you will usually find better rates by shopping around with new lenders.
Will refinancing a personal loan hurt my credit?
There will be a small temporary drop when the lender does a hard credit pull. But over time, if you make on-time payments and reduce your interest burden, your credit should improve.
Is there a limit to how many times I can refinance a personal loan?
There is no legal limit. But every refinance comes with costs and a credit inquiry. Refinancing too often usually does more harm than good.
What happens to my old loan when I refinance?
The new lender pays off your old loan in full. The old account is then marked as paid off and closed. This is generally good for your credit history.
Can I refinance if I have missed payments on my current loan?
You can try, but missed payments hurt your credit score, which makes it harder to qualify for a lower rate. You may want to get current on all payments and wait a few months before applying.
Rates as of May 2026. Rates and terms change often. Check with each lender for the most current information.