How to Refinance a Personal Loan

Refinancing a personal loan does hurt your credit but only a small amount and only in the short term. Since refinancing a personal loan involves taking out a new debt to pay off the old one, the hard pull triggered by your application will cause a drop in your credit score.

There are a few other ways refinancing a loan can temporarily impact your credit score, too. You can learn more below, and if you want to estimate how refinancing a personal loan might hurt or help your credit in particular, you can use WalletHub's free credit score simulator tool.

Ways Refinancing a Personal Loan Can Hurt Your Credit

Hard Inquiry

The hard credit inquiry that occurs when you apply for a new loan or balance transfer credit card will cause a small, temporary decrease in your credit score.

Increased Debt Level From Fees

If you refinance using a new loan with an origination fee or a credit card with a balance transfer fee, you will have a slightly increased debt level, which can have a small negative impact on your credit score.

Reduced Account Age

Refinancing a personal loan can decrease the average age of your accounts (older is better for your credit score).

You should be able to bounce back from the credit score drop associated with refinancing a personal loan after several months of on-time payments.

Other Key Things to Know About Refinancing & Credit

Since refinancing a personal loan will hurt your credit temporarily, it's best to avoid doing it right before you're going to make a big financial commitment that requires a credit pull, like buying a car or a house. But if you're not in that situation, refinancing can be a huge help not only to your credit, but also to your finances overall.

When you refinance a personal loan, you move the debt to another lender with a lower interest rate. That helps you pay off the loan sooner and thus get debt-free faster, which is fantastic for your credit. In addition, having a lower interest rate makes it easier to ensure that your payments are on time, which is vital for improving your credit score. Plus, if you use a single loan or credit card to refinance multiple personal loans, the fact that you'll have fewer open accounts with balances can give your score a boost.

Yes, you can refinance an Upgrade personal loan using either a new personal loan or a balance transfer credit card from a different lender. By paying off your remaining Upgrade balance with a new, lower-interest loan or credit card, you will shift what you owe to the new lender and save money on finance charges. 

How to Refinance a Loan from Upgrade With a New Loan

1. Check your credit score. Checking your credit helps you see if you're able to get approved with the score you have or if you need to spend some time improving it. You can check your credit score for free on WalletHub.
2. Get pre-qualified (if possible). Pre-qualifying shows you which lenders may approve you and what rates may be available to you. You can pre-qualify with multiple lenders for free on WalletHub.
3. Apply for the new loan. You can apply for the loan online, in person or over the phone. You'll need to give the lender some personal information when you apply, like your name, address and date of birth. The lender will also need some financial information, like your employment status and income.
4. Wait for funds. You should get your loan within a few business days of being approved. The lender will either write you a paper check or do a bank transfer.
5. Pay off the old loan. Once you receive the money, you'll need to pay off the old loan.  
6. Repay the new loan. After the old loan is paid off, you'll then need to repay the new loan. This could take a few months or years to do.

Refinancing a Loan from Upgrade With a Balance Transfer

The biggest difference between using a balance transfer credit card and a personal loan for refinancing is that many cards offer 0% introductory APRs. If you can pay off your loan before the introductory period ends, you won't have to pay interest.

To learn more, check out WalletHub's balance transfer guide.

Final Thoughts

You should refinance a personal loan from Upgrade if it saves you money. Ideally, your new loan or credit card should have a lower APR than your old loan. You can qualify for a lower APR if your credit score and overall financial situation are better than when you got the first loan.

Finally, it's worth noting that Upgrade does not offer personal loan refinancing services for its own loans. In other words, you can't use a Upgrade loan to pay off another Upgrade loan and get a lower interest rate in the process.

Yes, you can refinance a Wells Fargo personal loan using either a new personal loan or a balance transfer credit card from a different lender. By paying off your remaining Wells Fargo balance with a new, lower-interest loan or credit card, you will shift what you owe to the new lender and save money on finance charges. 

How to Refinance a Loan from Wells Fargo With a New Loan

1. Check your credit score. Checking your credit helps you see if you're able to get approved with the score you have or if you need to spend some time improving it. You can check your credit score for free on WalletHub.
2. Get pre-qualified (if possible). Pre-qualifying shows you which lenders may approve you and what rates may be available to you. You can pre-qualify with multiple lenders for free on WalletHub.
3. Apply for the new loan. You can apply for the loan online, in person or over the phone. You'll need to give the lender some personal information when you apply, like your name, address and date of birth. The lender will also need some financial information, like your employment status and income.
4. Wait for funds. You should get your loan within a few business days of being approved. The lender will either write you a paper check or do a bank transfer.
5. Pay off the old loan. Once you receive the money, you'll need to pay off the old loan.  
6. Repay the new loan. After the old loan is paid off, you'll then need to repay the new loan. This could take a few months or years to do.

Refinancing a Loan from Wells Fargo With a Balance Transfer

The biggest difference between using a balance transfer credit card and a personal loan for refinancing is that many cards offer 0% introductory APRs. If you can pay off your loan before the introductory period ends, you won't have to pay interest.

To learn more, check out WalletHub's balance transfer guide.

Final Thoughts

You should refinance a personal loan from Wells Fargo if it saves you money. Ideally, your new loan or credit card should have a lower APR than your old loan. You can qualify for a lower APR if your credit score and overall financial situation are better than when you got the first loan.

Finally, it's worth noting that Wells Fargo does not offer personal loan refinancing services for its own loans. In other words, you can't use a Wells Fargo loan to pay off another Wells Fargo loan and get a lower interest rate in the process.

The downside of refinancing is that you might not always be able to get a rate on your new loan or credit card that's better than your current rate, in which case that defeats the purpose. You could also potentially have fees on the new loan or credit card, which increases the total amount you need to borrow. And refinancing a debt also leads to a hard pull of your credit, which will temporarily cause a small drop in your credit score.

That said, refinancing is often a very good thing, and can save you a significant amount of money. Plus, the hard pull is easy to recover from after a few months of on-time payments.

Yes, you can refinance a SoFi personal loan using either a new personal loan or a balance transfer credit card from a different lender. By paying off your remaining SoFi balance with a new, lower-interest loan or credit card, you will shift what you owe to the new lender and save money on finance charges. 

How to Refinance a Loan from SoFi With a New Loan

1. Check your credit score. Checking your credit helps you see if you're able to get approved with the score you have or if you need to spend some time improving it. You can check your credit score for free on WalletHub.
2. Get pre-qualified (if possible). Pre-qualifying shows you which lenders may approve you and what rates may be available to you. You can pre-qualify with multiple lenders for free on WalletHub.
3. Apply for the new loan. You can apply for the loan online, in person or over the phone. You'll need to give the lender some personal information when you apply, like your name, address and date of birth. The lender will also need some financial information, like your employment status and income.
4. Wait for funds. You should get your loan within a few business days of being approved. The lender will either write you a paper check or do a bank transfer.
5. Pay off the old loan. Once you receive the money, you'll need to pay off the old loan.  
6. Repay the new loan. After the old loan is paid off, you'll then need to repay the new loan. This could take a few months or years to do.

Refinancing a Loan from SoFi With a Balance Transfer

The biggest difference between using a balance transfer credit card and a personal loan for refinancing is that many cards offer 0% introductory APRs. If you can pay off your loan before the introductory period ends, you won't have to pay interest.

To learn more, check out WalletHub's balance transfer guide.

Final Thoughts

You should refinance a personal loan from SoFi if it saves you money. Ideally, your new loan or credit card should have a lower APR than your old loan. You can qualify for a lower APR if your credit score and overall financial situation are better than when you got the first loan.

Finally, it's worth noting that SoFi does not offer personal loan refinancing services for its own loans. In other words, you can't use a SoFi loan to pay off another SoFi loan and get a lower interest rate in the process.

Yes, you can refinance a Citizens Bank personal loan using either a new personal loan or a balance transfer credit card from a different lender. By paying off your remaining Citizens Bank balance with a new, lower-interest loan or credit card, you will shift what you owe to the new lender and save money on finance charges. 

How to Refinance a Loan from Citizens Bank With a New Loan

1. Check your credit score. Checking your credit helps you see if you're able to get approved with the score you have or if you need to spend some time improving it. You can check your credit score for free on WalletHub.
2. Get pre-qualified (if possible). Pre-qualifying shows you which lenders may approve you and what rates may be available to you. You can pre-qualify with multiple lenders for free on WalletHub.
3. Apply for the new loan. You can apply for the loan online, in person or over the phone. You'll need to give the lender some personal information when you apply, like your name, address and date of birth. The lender will also need some financial information, like your employment status and income.
4. Wait for funds. You should get your loan within a few business days of being approved. The lender will either write you a paper check or do a bank transfer.
5. Pay off the old loan. Once you receive the money, you'll need to pay off the old loan.  
6. Repay the new loan. After the old loan is paid off, you'll then need to repay the new loan. This could take a few months or years to do.

Refinancing a Loan from Citizens Bank With a Balance Transfer

The biggest difference between using a balance transfer credit card and a personal loan for refinancing is that many cards offer 0% introductory APRs. If you can pay off your loan before the introductory period ends, you won't have to pay interest.

To learn more, check out WalletHub's balance transfer guide.

Final Thoughts

You should refinance a personal loan from Citizens Bank if it saves you money. Ideally, your new loan or credit card should have a lower APR than your old loan. You can qualify for a lower APR if your credit score and overall financial situation are better than when you got the first loan.

Finally, it's worth noting that Citizens Bank does not offer personal loan refinancing services for its own loans. In other words, you can't use a Citizens Bank loan to pay off another Citizens Bank loan and get a lower interest rate in the process.

Yes, you can refinance an Avant personal loan using either a new personal loan or a balance transfer credit card from a different lender. By paying off your remaining Avant balance with a new, lower-interest loan or credit card, you will shift what you owe to the new lender and save money on finance charges. 

How to Refinance a Loan from Avant With a New Loan

1. Check your credit score. Checking your credit helps you see if you're able to get approved with the score you have or if you need to spend some time improving it. You can check your credit score for free on WalletHub.
2. Get pre-qualified (if possible). Pre-qualifying shows you which lenders may approve you and what rates may be available to you. You can pre-qualify with multiple lenders for free on WalletHub.
3. Apply for the new loan. You can apply for the loan online, in person or over the phone. You'll need to give the lender some personal information when you apply, like your name, address and date of birth. The lender will also need some financial information, like your employment status and income.
4. Wait for funds. You should get your loan within a few business days of being approved. The lender will either write you a paper check or do a bank transfer.
5. Pay off the old loan. Once you receive the money, you'll need to pay off the old loan.  
6. Repay the new loan. After the old loan is paid off, you'll then need to repay the new loan. This could take a few months or years to do.

Refinancing a Loan from Avant With a Balance Transfer

The biggest difference between using a balance transfer credit card and a personal loan for refinancing is that many cards offer 0% introductory APRs. If you can pay off your loan before the introductory period ends, you won't have to pay interest.

To learn more, check out WalletHub's balance transfer guide.

Final Thoughts

You should refinance a personal loan from Avant if it saves you money. Ideally, your new loan or credit card should have a lower APR than your old loan. You can qualify for a lower APR if your credit score and overall financial situation are better than when you got the first loan.

Finally, it's worth noting that Avant does not offer personal loan refinancing services for its own loans. In other words, you can't use a Avant loan to pay off another Avant loan and get a lower interest rate in the process.

Yes, you can refinance a LendingClub personal loan using either a new personal loan or a balance transfer credit card from a different lender. By paying off your remaining LendingClub balance with a new, lower-interest loan or credit card, you will shift what you owe to the new lender and save money on finance charges. 

How to Refinance a Loan from LendingClub With a New Loan

1. Check your credit score. Checking your credit helps you see if you're able to get approved with the score you have or if you need to spend some time improving it. You can check your credit score for free on WalletHub.
2. Get pre-qualified (if possible). Pre-qualifying shows you which lenders may approve you and what rates may be available to you. You can pre-qualify with multiple lenders for free on WalletHub.
3. Apply for the new loan. You can apply for the loan online, in person or over the phone. You'll need to give the lender some personal information when you apply, like your name, address and date of birth. The lender will also need some financial information, like your employment status and income.
4. Wait for funds. You should get your loan within a few business days of being approved. The lender will either write you a paper check or do a bank transfer.
5. Pay off the old loan. Once you receive the money, you'll need to pay off the old loan.  
6. Repay the new loan. After the old loan is paid off, you'll then need to repay the new loan. This could take a few months or years to do.

Refinancing a Loan from LendingClub With a Balance Transfer

The biggest difference between using a balance transfer credit card and a personal loan for refinancing is that many cards offer 0% introductory APRs. If you can pay off your loan before the introductory period ends, you won't have to pay interest.

To learn more, check out WalletHub's balance transfer guide.

Final Thoughts

You should refinance a personal loan from LendingClub if it saves you money. Ideally, your new loan or credit card should have a lower APR than your old loan. You can qualify for a lower APR if your credit score and overall financial situation are better than when you got the first loan.

Finally, it's worth noting that LendingClub does not offer personal loan refinancing services for its own loans. In other words, you can't use a LendingClub loan to pay off another LendingClub loan and get a lower interest rate in the process.

Yes, you can refinance a Discover personal loan using either a new personal loan or a balance transfer credit card from a different lender. By paying off your remaining Discover balance with a new, lower-interest loan or credit card, you will shift what you owe to the new lender and save money on finance charges. 

How to Refinance a Loan from Discover With a New Loan

1. Check your credit score. Checking your credit helps you see if you're able to get approved with the score you have or if you need to spend some time improving it. You can check your credit score for free on WalletHub.
2. Get pre-qualified (if possible). Pre-qualifying shows you which lenders may approve you and what rates may be available to you. You can pre-qualify with multiple lenders for free on WalletHub.
3. Apply for the new loan. You can apply for the loan online, in person or over the phone. You'll need to give the lender some personal information when you apply, like your name, address and date of birth. The lender will also need some financial information, like your employment status and income.
4. Wait for funds. You should get your loan within a few business days of being approved. The lender will either write you a paper check or do a bank transfer.
5. Pay off the old loan. Once you receive the money, you'll need to pay off the old loan.  
6. Repay the new loan. After the old loan is paid off, you'll then need to repay the new loan. This could take a few months or years to do.

Refinancing a Loan from Discover With a Balance Transfer

The biggest difference between using a balance transfer credit card and a personal loan for refinancing is that many cards offer 0% introductory APRs. If you can pay off your loan before the introductory period ends, you won't have to pay interest.

To learn more, check out WalletHub's balance transfer guide.

Final Thoughts

You should refinance a personal loan from Discover if it saves you money. Ideally, your new loan or credit card should have a lower APR than your old loan. You can qualify for a lower APR if your credit score and overall financial situation are better than when you got the first loan.

Finally, it's worth noting that Discover does not offer personal loan refinancing services for its own loans. In other words, you can't use a Discover loan to pay off another Discover loan and get a lower interest rate in the process.

Refinancing a personal loan means lowering the interest rate by taking out a new loan with better terms and using that money to pay off the old loan. The purpose of refinancing a personal loan is to save money and get out of debt sooner. You can also refinance a personal loan with a balance transfer credit card.

Example of Refinancing a Personal Loan with a Loan

If you want to refinance a $10,000 personal loan balance that is accruing interest at a 12% APR and has 5 years of installment payments remaining, for example, you can take out a new loan to pay off the balance. If the new loan has an APR of 10% and a repayment period of 3 years, you could save more than $1,700 over the life of the loan.

Example of Refinancing a Personal Loan with a Credit Card

Say you want to refinance a $10,000 personal loan that has an 18% APR using a balance transfer credit card. Assuming the balance transfer card has a 0% APR for 12 months, a balance transfer fee of 3% and a regular APR of 15%, it will take you 3 years to pay off the balance with monthly payments of $320. This will save you about $2,000 in interest compared to the original loan.

Popular Options for Refinancing a Personal Loan

*According to multiple third-party sources.

To see more offers, check out the complete list of the best personal loans for refinancing and the best balance transfer credit cards available right now.