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How to refinance your personal loan

Refinance your personal loan with a lower rate and get out of debt faster.

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If you're paying off a personal loan at the moment, it's worth checking how your loan stacks up with other options on the market. If you find a personal loan with a lower interest rate you can apply and use that loan to pay off your current loan to pay less interest and lower your repayments. It's important to check that refinancing your personal loan is actually cheaper after you factor in any early exit fees or establishment fees that might apply.

What is personal loan refinancing?

Personal loan refinancing is when you take out a new loan, preferably with better terms, and use it to pay off existing loan debt.

If you qualify for a loan with a lower interest rate than your current personal loan, refinancing might help to save you money. Refinancing to a more competitive rate may lower your monthly repayments and/or your total interest repayments over the course of the loan.

You can also use refinancing to consolidate multiple debts into a single monthly repayment.

  • Note: Personal loan interest rates have dropped as a result of COVID-19. If you currently have an outstanding personal loan account, you may find that you are eligible for a lower rate loan.

How does it work?

Refinancing a personal loan works in much the same way as refinancing a home loan. You apply for a new loan, which covers the amount you have left to pay on your current loan(s) and use the funds to pay off the existing debt. Some lenders can organise the funds to be paid directly to other lenders on your behalf.

You will still have the same amount of debt but will be saving money if the new loan offers better terms, lower fees or a reduced interest rate than your existing loan.

Why should I refinance?

There are a few reasons why people choose to refinance their personal loans:

  • Your credit score has improved. If your credit score has improved, you may qualify for a loan with better terms and a lower rate than your current loan(s). It is always a good idea to keep an eye on your credit score; if you notice an improvement, it might be time to consider refinancing.
  • You've found a better deal. If you think you've found a better deal, it might be worth using a personal loan repayment calculator, such as the one below, to compare the two loan options and see if the move will be worth it.
  • You're consolidating debt. If you're refinancing a personal loan to consolidate your debt then you will need to do a few more calculations. First, you should calculate the total monthly repayments for each of your existing loans. This should include fees, rates and any other charges you incur from your loan. You should then compare this figure to what you can expect to pay for the new consolidated loan. Using a personal loan repayment calculator can simplify this process.

However, you should always consider all variables before refinancing. Take into account any fees from all loans concerned, such as early exit penalty fees or establishment costs, as these might offset the savings of a lower interest rate.

OurMoneyMarket Personal Loan

OurMoneyMarket Personal Loan


5.65 % p.a.

fixed rate


6.27 % p.a.

comparison rate

  • Personalised fixed rate
  • Flexible payment options
  • Fast online application
Security Logo

100% confidential application

OurMoneyMarket Personal Loan

⭐ Finder Exclusive: Apply before 30th of June 2022 to secure a 0.20% p.a. discount for the full term of your loan.

  • Interest rate from: 5.65% p.a.
  • Comparison rate: 6.27% p.a.
  • Interest rate type: Fixed
  • Application fee: 1.50% - 6% of loan amount. Minimum fee $250.
  • Minimum loan amount: $2,001
  • Maximum loan amount: $75,000
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Compare personal loan refinance options below

1 - 7 of 7
Name Product Mobile details underline Interest Rate (p.a.) Comp. Rate (p.a.) Rate Type Application Fee Monthly Fee Monthly Repayment
OurMoneyMarket Personal Loan Fixed, 1 - 7 Years, $2,001 - $75,000
OurMoneyMarket Personal Loan
1 - 7 Years, $2,001 - $75,000
to 20.99%
to 23.83%
1.50% - 6%
min. $250
You'll receive a fixed rate from 5.65% p.a. to 20.99% p.a. based on your risk profile.
A personalised loan from $2,001 to $75,000 that varies based on your credit history and financial situation.

Finder Exclusive: Apply before 30th of June 2022 to secure a 0.20% p.a. discount for the full term of your loan.
Citi Personal Loan Plus Variable, 3 - 5 Years, $5,000 - $75,000
Citi Personal Loan Plus
3 - 5 Years, $5,000 - $75,000
You'll receive a variable rate of 8.90% p.a. with a comparison rate of 9.18% p.a. if you're approved.
A credit limit up to $75,000 that you can continue to draw down over terms up to 5 years.

Finder Exclusive: Earn 150,000 Velocity Points when you apply and activate your account within 90 days from approval.
Wisr Personal Loan Fixed, 3 - 7 Years, $5,000 - $64,000
Wisr Personal Loan
3 - 7 Years, $5,000 - $64,000
to 17.95%
to 18.37%
You'll receive a fixed rate between 6.95% p.a. and 17.95% p.a. based on your risk profile
A loan from $5,000 that charges no fees for extra or early repayments. Keep in mind security is required in some cases.
NOW Finance No Fee Unsecured Personal Loan Fixed, 18 Months - 7 Years, $5,000 - $50,000
NOW Finance No Fee Unsecured Personal Loan
18 Months - 7 Years, $5,000 - $50,000
to 19.95%
to 19.95%
You'll receive a fixed rate between 5.95% p.a. and 19.95% p.a. based on your risk profile
Borrow from $5,000 to $7,999 with loan terms between 18 months and 3 years or borrow $8,000 to $50,000 with loan terms between 18 months and 7 years.

Latitude Variable Rate Personal Loan Variable, 2 - 7 Years, $5,000 - $70,000
Latitude Variable Rate Personal Loan
2 - 7 Years, $5,000 - $70,000
to 25.99%
to 29.20%
0% - 5%
You'll receive a variable rate between 5.75% p.a. and 25.99% p.a. based on your risk profile
Apply for what you need from $5,000 and use it for a range of purposes. Repay weekly, fortnightly or monthly. You can check your interest rate before applying with no impact to your credit score.
Great Southern Bank Unsecured Fixed Rate Personal Loan Fixed, 1 - 7 Years, $5,000 - $65,000
Great Southern Bank Unsecured Fixed Rate Personal Loan
1 - 7 Years, $5,000 - $65,000
You'll receive a guaranteed rate of 9.39% p.a. with a comparison rate of 9.64% p.a. if you're approved.
An unsecured loan from $5,000 with flexible repayments and no monthly fee.
Great Southern Bank Unsecured Variable Rate Personal Loan Variable, 1 - 7 Years, $5,000 - $75,000
Great Southern Bank Unsecured Variable Rate Personal Loan
1 - 7 Years, $5,000 - $75,000
You'll receive a guaranteed rate of 11.89% p.a. with a comparison rate of 12.15% p.a. if you're approved. Note: This rate may vary during the loan term.
Borrow from $5,000 with the option for flexible repayments and no monthly fees.

Compare up to 4 providers

How to compare refinance options

When considering whether to refinance, you'll want to compare your existing debt to other loans with better terms. While finding a lower interest rate is obviously a good first step, it's not the only important factor to focus on. Other methods of comparing loans include the following:

  • Fees

    Look at ongoing fees and repayments as well as loan establishment costs. A loan with a low interest rate, but high fees, may end up costing you more than your existing debt. You can get an idea of fees by checking the personal loan comparison rate, but you should also read the terms and conditions thoroughly. It's also a good idea to check whether your existing debts have any early exit penalties as these might counter some of the potential savings that you'll make by switching.

  • Additional features

    Consider the additional features of a loan to make sure they suit your needs. For example, if you sometimes make additional repayments, you should confirm whether this is allowed with the new loan. You may also want to consider whether you'd want your new loan to feature a redraw facility.

  • Fixed or variable rate

    Would you prefer to have a personal loan with a fixed or variable interest rate? If you are refinancing from a fixed rate personal loan to a variable rate personal loan, you may save money as long as the variable rate lasts, but this rate could change and you may discover you would have been better off staying with your original loan.

  • Physical locations

    Many neobank and non-bank personal loan lenders don't have branches. Therefore, if you're someone who'd prefer your lender to have a physical branch that you can visit if you ever have any issues or queries, this is something you might want to take into consideration when switching to a new loan.

How to choose a bank/lender for refinancing a personal loan?

The key to choosing the right bank or lender when refinancing a personal loan is doing your research. It is worth noting that many non-bank lenders offer personal loans with lower rates than more traditional banks. Though this will vary from lender to lender.

While which specific lender that you opt for will depend on your preferences and circumstances, it's still good to get an idea of what different types of lender are available on the market. Different types of lenders you can choose for a personal loan include:

  • Traditional banks. Traditional banks, also sometimes referred to as "bricks-and-mortar" banks are the most traditional form of personal loan borrowing. Bigger banks often require excellent credit histories. They may also require security when it comes to personal loans.
  • Neobanks. These lenders source their own funding and make a margin on the difference. Often, neobanks will offer personalised interest rates to customers based on their financial circumstances and credit scores.
  • Credit unions and building societies. These financial institutions, also known as "mutuals", are member-owned and not-for-profit, so any profits earned are put directly back into products and services.
  • P2P lenders. P2P lenders facilitate a platform where investors finance a portfolio of personal loans and earn interest on what they lend. Borrowers of P2P loans are given an individual rate based on their credit score.

Can I refinance with the same lender?

Often, lenders do not refinance loans that they originally gave out. However, if you know that your lender is offering a better deal to new customers or that you can qualify for a lower rate with your lender's competitor, you may be able to negotiate a more favourable rate.

Essentially, your current lender probably doesn't want to lose your future interest payments by you paying out of the loan early. Therefore, it's a good idea to see what it may be able to offer. However, it's important that you do your research first to ensure you have a good negotiating standpoint in regard to better deals, before contacting your lender.

Does refinancing your personal loan hurt your credit score?

Refinancing can hurt your credit score in some circumstances and it can improve it in others. Take a look at some of the ways refinancing can potentially harm and benefit your credit score:

How it can benefit your credit score
  • Fewer open accounts. If you're taking out a new loan to refinance multiple personal loans, your credit score could improve, because you'll have fewer open accounts with outstanding balances.
  • Meet your repayments. If you make your repayments on time, your credit score will improve – this is the biggest contributing factor towards your credit score.
How it can harm your credit score
  • Multiple applications. If you apply for multiple new personal loans, you may find that your credit score takes a hit.
  • You don't meet your repayments. Defaulting on a new loan will have a negative effect on your credit score.

Will you save by refinancing your personal loan?

Saving money by refinancing your personal loan is (pretty much) the name of the game. Therefore, it's important to ensure that you are saving money by changing your loan. If you've found a loan that you think suits your needs, compare it side by side with your existing loan in the loan comparison calculator below.

5 steps to refinance a personal loan

  1. Compare your personal loan options: Take a look at what personal loans are available to see if you can get a better deal.
  2. Calculate the costs of refinancing: Include break and exit fees and the establishment fees for your new loan to ensure it will be worth your while.
  3. Apply for the new personal loan: If you meet the criteria for the new personal loan, submit your application. You may have to note that your loan purpose is to refinance or consolidate.
  4. Pay off your current loan with the funds from the new loan: In the case of some debt consolidation loans, the lender may be able to arrange this for you. However, many personal loan lenders deposit funds directly into your current account, meaning you will need to organise paying off your existing loan yourself.
  5. Make sure the old loan is closed: Confirm with your previous lender that your loan account is closed and you have no balance outstanding.

What are the costs of refinancing a personal loan?

Banks and lenders don't want you jumping ship every time you see a cheaper rate from a competitor, which is why refinancing can come at a cost.

Fees to take into account when calculating the costs of refinancing include the following:

  • Application fees could set you back as much as $300, so confirm if you will be charged a fee on the new loan.
  • Early repayment fees are sometimes charged by lenders and can put a considerable dent in the savings you could make from switching.
  • Ongoing fees are also a cost that should be taken into consideration. These fees can add up quite quickly and may offset a lower rate offered by the new loan.

When determining the value of refinancing, remember to take all aspects of both loans into consideration.

More guides on Finder

Personal Loan Offers

Important Information*
Logo for Harmoney Unsecured Personal Loan
Harmoney Unsecured Personal Loan

You'll receive a fixed rate between 5.35% p.a. and 19.09% p.a. based on your risk profile.
Apply for a loan up to $70,000 and repay your loan over 3, 5 or 7 years terms.

Logo for ANZ Fixed Rate Personal Loan
ANZ Fixed Rate Personal Loan

You'll receive a fixed rate between 6.49% p.a. and 15.99% p.a. ( 7.41% p.a. to 16.84% p.a. comparison rate) based on your risk profile
Apply for up to $50,000 to use for a variety of purposes without needing to add security. Available to self-employed applicants.

Logo for NAB Personal Loan Unsecured Fixed
NAB Personal Loan Unsecured Fixed

You'll receive a fixed rate between 6.99% p.a. and 18.99% p.a. ( 7.91% p.a. to 19.83% p.a. comparison rate) based on your risk profile
Borrow from $5,000 to $55,000, with 1 years to 7 years loan terms available. This loan comes with no fees for extra repayments and no early exit fees.

Logo for SocietyOne Unsecured Personal Loan
SocietyOne Unsecured Personal Loan

You'll receive a fixed rate between 6.95% p.a. and 22.49% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.

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2 Responses

  1. Default Gravatar
    DanApril 1, 2019

    Hi, I’ve got a loan of $35k+ currently with a 16.4%pa variable interest rate received about 4 years ago when my income was $40k/year less than now. Can I negotiate my loan amount with my big 4 bank lender? Or would I be better off with another lender?

    • Avatarfinder Customer Care
      MaiApril 2, 2019Staff

      Hi Dan,

      Thank you for contacting Finder.

      While you can negotiate home loans, you can also try if that could also be available for personal loans if you are to refinance. To help you with negotiating, it may be a good idea to take a look around to see what interest rates are currently offering to new customers by the big four and other lenders too. This may help you work out if you’re getting a good deal and it will also strengthen your argument when it comes time to talk to the bank for possible negotiation.

      Hope this helps.

      Kind Regards,

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