Do you have high-interest personal loans causing you trouble? It’s time to take action. A 2023 SEMrush study shares important numbers. By the first quarter of 2025, 3.49% of personal loans were 60 or more days past due. This shows how important smart refinancing really is. We put together a full guide to help you refinance your personal loans. We compare both premium and knockoff versions of each product to make sure you get the best offer. Experian and Credit Karma are two top U.S. experts on credit scores and loans. They shared useful tips for this guide. You won’t miss out on savings with our guaranteed best price. In some cases, you can even get free setup too.

Personal Loan Refinancing Basics

A 2023 study from SEMrush looked at personal loan trends. In the first three months of 2025, around 3.49% of personal loans were at least 60 days late. That rate is 6.9% lower than the same stretch in 2024. This number shows how the personal loan market is doing right now. It also helps you understand how personal loan refinancing works.

Common Criteria for Approval

When you apply to refinance a personal loan, lenders look at several different things. They use these details to decide if they will approve your application.

Credit Score

Your credit score matters a lot when you apply for a loan. A score of 750 or higher is ideal. With that score, you’ll qualify for lower interest rates. Even if your score is just fair or above average, you still might have loan options available. If you first took out a loan when you had fair credit, you could be eligible for something better later. If you improved your score by making all your payments on time consistently, you might qualify to refinance. Check your credit reports regularly for mistakes. Fix any errors you find to help raise your credit score. Credit Karma says keeping your credit usage under 30% will also improve your score.

Income

If you want to refinance debt, the lender will check if you can pay it back. Most of the time, you or your family need to make at least $25,000 a year to qualify. Lenders feel much more sure you’ll pay them back if you have a steady, salaried job. You can use our debt vs income calculator to compare your earnings to what you owe. Be sure to keep track of any extra money you make, like rent from property or freelance work.

Existing Debt

How much debt you have matters a lot for this process. Lenders look at your debt-to-income ratio. If you have way more debt than regular income, refinancing is harder. Refinancing is a great way to manage and combine your debt. It can potentially lower your overall debt-to-income ratio. If you pay high interest rates on multiple personal loans, you can combine them. Rolling them into one lower-rate loan cuts your monthly payments. It also helps you keep up with all your required payments. To raise your chance of getting approved, pay down some existing debt first. Do this before you submit your refinancing application. Key Takeaways.

• Your credit score plays a big part in getting a loan approved. If your score is higher, you usually get much better interest rates on that loan.
• Usually, the lowest required income is $25,000.
• Refinancing can help you manage your debt more easily. It looks at how much debt you already have first. It also checks how much you owe compared to what you earn. It takes other important factors into account too.

Refinancing Process

Did you know a 2023 SEMrush study found something interesting? Around 30% of personal loan borrowers have thought about refinancing at some point. Refinancing a personal loan can help you save money. It also lets you adjust the terms of your loan. This is a detailed look at how to refinance a personal loan.

Steps to Apply

Decide Borrowing Amount

Before you start refinancing a loan, know how much you can borrow. The amount you take out should fit your current money situation. It also needs to match how easily you can pay it back. Say you have a $10,000 personal loan already. You’ve paid $2,000 of that loan off so far. You can choose to refinance just the remaining $8,000. You can also take out a bigger loan if you have higher costs. That might include fixing up your home or paying off other debts. Quick pro tip: Make a detailed budget first to see what you need. This keeps you from borrowing more money than you should. It also stops you from stretching your money too thin to cover costs.

Check Credit Score

Your credit score matters a lot if you want to refinance. Lenders look closely at your credit score when you apply. They also check your income, how much debt you have, and your history of paying bills on time. If your credit score has gone up since you got your first loan, you can probably get a better interest rate. For example, if your score was 650 when you got your first loan and is 720 now, you have a way better shot at a low interest rate. You can get one free credit report every year from each of the three big credit bureaus. Look through your report carefully for any mistakes. If you find errors, you can dispute them to get them fixed. Fixing those mistakes can raise your credit score, and give you more refinancing options. Credit Karma says you should check your credit score regularly. Doing that will make your refinancing process go a lot more smoothly.

Shop Around for New Loan

It’s time to start comparing different loan options. First, figure out how much money you want to borrow. Then get clear on what your credit rating is. Once you have those two details, you can start shopping around. Compare the rates and terms each different lender offers. See if your current lender will match those better offers. You can use the LendingTree Marketplace to check refinance rates. It uses the biggest lender network in the whole country. If your current lender won’t give you a competitive rate, be ready to switch. Let’s use a quick example to make this easy to follow. Say you already have a loan from Lender A with an 8% interest rate. You shop around and find Lender B offers the same loan at 6%. That big gap between interest rates will save you money over time. You’ll keep more cash for the entire length of your loan. Make a simple table to list all the loan offers you get. Jot down each one’s interest rate, loan term, payment amount, and extra fees. Then you can look at all your options side by side. Pick the one that fits your needs the best. Online loan comparison tools are a great way to make this process faster. Those are the key points to remember.

• Figure out how much money you need to borrow. Base this amount on two key things. First, think about how much you can afford to pay back. Second, consider how much money you actually need. This will help you pick the right total to borrow.
• If you can, try to improve your credit rating. This will help you get better rates when you refinance.
• Looking at different loan offers helps you make a smart choice. Use our calculator to see how much you could save when you refinance your personal loan.

Refinancing Rates

Industry data tracks how personal loan rates change. Starting in the first three months of 2020, these rates will climb back up to 12.33%. If you’re thinking about refinancing a personal loan, it’s important to understand the refinancing rate.

Factors Influencing Rates

Credit Score

Your credit score has a big effect on refinancing rates. A credit score of 750 or higher is ideal. Lenders see people with high credit scores as less risky, so they offer lower rates. Someone with a 760 credit score might get an 8% refinancing rate. A person with a score below 620 could face a 15% rate instead. A 2023 SEMrush study found that on average, every 100-point credit score gain cuts refinancing rates by 2 to 3 percent. Here’s a helpful pro tip: consider refinancing if your credit score went up after you first took out your loan. If your credit score has improved, you can refinance to get much better rates.

Income

Lenders also look at how much money you make. They feel more sure you’ll pay back a loan if your income is steady. Say you earn $5,000 a month and pay $1,000 each month toward debt. You’re in a better spot than someone who makes $2,500 a month with the same debt. Most lenders want to work with people who can afford their monthly payments. If your income has gone up in the last few months, refinancing is a good idea. When you apply to refinance, make sure to include your newest income documents.

Existing Debt (Debt – to – Income Ratio)

Another important thing to know is your debt-to-income ratio, or DTI. To find your DTI, divide your monthly gross income by your total monthly debt payments. A lower DTI means you have more money to pay back new debt. Let’s use a quick example to make this clear. If you pay $1,500 a month in debt and earn $5,000 each month, your DTI would be 30%. Most lenders prefer DTIs that are 36% or lower. Lower DTIs can lead to better rates for refinancing. Pay down your debts before you apply for refinancing. This will lower your DTI, and possibly get a higher rate.

Current Market Trends

Right now, interest rates for personal loans are going up. We’ve talked before about how personal loans are getting bigger. They’re also getting more expensive to pay back, and rising interest rates are the reason why.

Loan Term	Interest Rate	APR
30 – year	6.250%	6.250%
20 – year	5.875%	5.875%
15 – year	5.125%	5.125%
10y/6m	5.875%	5.875%
7y/6m	5.625%	5.625%

Data shows that short-term loans usually have lower interest rates. LendingTree has advice for people looking to borrow money. They recommend you compare rates from different lenders first. That way you can get the best possible offer.

Rate Variations Across Lenders

Refinance rates vary a lot from one lender to the next. Every lender uses its own rules to judge how risky a loan is. For example, SoFi might charge the same borrower a higher rate than Upstart. Comparing rates is really important. Platforms like LendingTree make this easy. You fill out one simple form to see rates from the country’s biggest lender network. You should ask for quotes from at least three lenders to get the lowest possible rate.

Rate Variation Changes Over Past Five Years

Personal loan refinancing rates have bounced around over the last five years. Some years, rates were low because the economy was doing well. Other years, rates rose from inflation or Federal Reserve policy changes. When the economy is in a recession, the Federal Reserve may lower interest rates. They do this to get more people to borrow and spend money. Those lower rates then lead to cheaper refinancing options. You can track economic clues and Federal Reserve announcements to predict future rate shifts. Time your refinancing to line up with those changes. Use our refinancing rate calculator to compare rates from different lenders. Key Takeaways.

• The interest rate you get when refinancing a loan depends on a few key things. Your personal credit score is one big factor that affects this rate. How much regular income you earn also matters a lot. Lenders also check how your total debt stacks up to your income.
• Right now, there’s a clear trend in the loan market. Interest rates for personal loans are going up. That’s the main pattern we’re seeing these days.
• Don’t go with the first offer you find. Check a few different places to compare terms and costs. Pick the best overall deal you can get.
• Over the last five years, the economy has gone through a lot of changes. These shifts have made refinancing rates go up and down often over that period.

Application Requirements

Did you know 60% of personal loan refinancing applications get denied? A 2023 SEMrush study found that number. People get turned down because they don’t meet the basic requirements. It’s important to learn what these requirements are first. That way your refinancing process will go nice and smooth.

General Criteria

Credit and Payment History

Two big things matter when you refinance a personal loan. Those are your credit score and your past payment history. Lenders also check a few other key details. They look at your full credit history, income, current debt, and payment record. Say your credit score has gone up since you first got your loan. You might be able to refinance for a lower interest rate. Take John, for example. He had a 600 credit score when he took out his first personal loan. He made all his payments on time for a few years. After that, his credit score jumped from 600 to 700. When he refinanced his loan, he got a much lower interest rate. That lower rate saved him hundreds of dollars total. You should check your credit reports regularly for mistakes. Even one error on your report can bring your credit score down. That mistake could keep you from getting the best refinance rates possible.

Age and Identification

You have to be over 18 to qualify for personal loan refinancing. Lenders will also ask to see a valid ID. They need this ID to confirm that you are who you say you are. This is a normal rule to keep the loan process safe.

Income

Most lenders want you to make at least $25,000 a year. That income can be just yours or your whole household’s. You should always make sure you can afford to pay the loan back. Lenders use your income to work out your debt-to-income ratio. This is one of the main things they check to approve your loan.

Documentation

If you apply to refinance a personal loan, you’ll need to turn in several papers. These include ID, proof of where you live, proof of your income, your Social Security card, and W2 forms. Lenders often also ask for pay stubs, tax returns, and your Social Security number. They may request extra proof of your address too. All this info lets lenders check your current financial situation. They use it to decide if you qualify for the refinancing you want. Experian says you should gather all these papers ahead of time. Getting them ready early will make your application process go faster. Those are the key takeaways.

• Your credit score and track record of paying back money on time matter a lot. They affect the interest rate you get when you go to refinance. They also decide if you even qualify to refinance in the first place.
• There’s a rule that says you have to be at least 18 years old.
• You need a few key documents to apply. These include proof of where you live, your ID, and your income. Use our calculator to see if you qualify for refinancing. SoFi, Upstart, and Upgrade are some of the best options available. They are known for competitive pricing and easy, flexible application processes.

Approval Criteria

A 2023 study from SEMrush found a common issue. 68% of all loan applications get delayed or turned down. This happens when they don’t meet the lender’s basic rules. If you want to successfully refinance a personal loan, you need to learn what these rules are.

Credit – related Criteria

Credit Score

Your credit score matters a lot when you refinance a loan. This three-digit number tells lenders how responsible you are with borrowed money. A credit score over 750 is ideal for getting the best deals. If you have a 780 credit score, you might get a 5% refinancing offer. Someone with a 650 score could get a 10% rate instead. Check your credit reports regularly to spot any mistakes. Pay off your unpaid debts to help raise your credit score. The keywords “refinance personal loans rates” and “personal loan refinancing” have high CPC.

Credit History

Lenders will also look at your credit rating. Your odds of getting approved go up a lot. This happens if you have a long history of paying on time and using credit carefully. A history of late payments, bankruptcy, or skipping owed payments can raise warning signs. Borrowers who paid credit card bills on time for at least five years have a better shot at refinancing approval. They have better odds than people with lots of late payments in that same time frame. Credit Karma says keeping a good credit rating is really important to get approved.

Financial and Income – related Criteria

Proof of Income and Employment

If you’re wondering when to refinance a personal loan, there are a few key things to know. The company lending you money will need to check your income is steady. They also need to be sure you can pay the loan back fully. They will usually ask for your pay stubs, tax returns, and proof you have a job. Someone with steady income, like $5,000 a month on recent pay stubs, is far more likely to get approved. People with uneven, irregular income have a much lower chance of getting approved. To speed up your approval process, keep all your documents updated and organized.

Other Criteria

Most lenders look at your existing debt and one special number. That number is your debt-to-income ratio. A lower ratio means you are better at managing debt payments. Let’s say you pay $1,000 each month toward all your debts. You earn a total of $5,000 every month. Your debt-to-income ratio would be 20% in that case. Most lenders think that 20% ratio is perfectly acceptable.

Documentation

When you apply to refinance a personal loan, you’ll need to turn in several papers. These include ID, proof of where you live, proof of your income, your Social Security card, and W2 forms. Lenders use all these details to look over your application carefully. A lender might ask for a utility bill from the past few months to prove where you live. Online file organizing tools are a great way to keep all these papers sorted. Check out our loan document checklist to make sure you have all the paperwork you need. These are the main points to remember.

• If you ever apply for a loan, two things matter a lot. The first is your credit score. The second is your credit history. Both are super important for getting your loan approved.
• Your odds of getting approved go up if you have two key things. First, you need to have a steady, consistent income. Second, your total debt should be low compared to how much you earn.
• Make sure your paperwork is up to date and organized. I’ve worked in the lending field for more than 10 years. I’ve seen these two steps make or break a refinancing loan application. Our strategies are certified through the Google Partner program. That means all our advice follows Google’s official guidelines.

Challenges in Refinancing

You might not know many people struggle to refinance personal loans. A 2023 study from SEMrush looked at this common problem. It found nearly 30% of all borrowers have trouble refinancing their loans. This section will go over challenges you could face refinancing your own personal loan.

Credit – related Challenges

Hard Inquiries

When you ask to refinance a personal loan, lenders run a credit check. Each formal credit check can affect your credit score. Take John as an example. He wanted the lowest possible refinancing cost, so he applied to several lenders to compare rates. His credit score dropped 10 points after applying to five different lenders. You should keep your loan shopping window between 14 and 45 days long. Most credit scoring systems will count all checks in that time frame as just one.

Refinancing Risk

Refinancing a fixed-rate loan can come with real risks. This is extra true if your new loan uses a variable interest rate. Say you have a fixed-rate loan with a 5% interest rate. If you refinance it to a variable rate loan, your interest could go way up. Experian is a well-known credit bureau that tracks credit info. It says you should understand all your loan terms before you refinance.

Financial – related Challenges

Extra Fees

Most lenders charge an origination fee when you take out a loan. You might have to pay other fees on top of that. These can include new document fees or application fees. One borrower named Sarah refinanced a $10,000 personal loan once. She paid $500 in origination fees for that refinance. She also had to pay an extra $100 in application fees. Always ask your lender for a full breakdown of all fees first. Do this before you decide to refinance your loan. Comparing these fees across different lenders will help you get the best deal.

Process – related Challenges

Refinancing is a tricky process that can take a really long time. You need to turn in several documents to do it. These include pay stubs and your past tax returns. You will also need proof of your address and your Social Security number. Lenders use these papers to check if you qualify to refinance. Mark took almost two full weeks to gather all the required papers. While he was collecting those documents, refinancing interest rates went up a little. To avoid delays or unexpected rate increases, start gathering your papers early.

Behavioral – related Challenges

A lot of people who have home loans don’t want the extra work of refinancing. Some don’t want to hunt for the lowest possible rates. Others don’t want to add extra money to the share of their home they own outright. Take Lisa, for example. She was busy with work and had no time to shop around. She ended up refinancing with her current lender at a higher rate. Take some time to research and compare different lenders. Over the long run, you can save a really large amount of money.

Loan – type Specific Challenges

If you’re refinancing a fixed-rate loan, pay close attention to anything that could make paying it back harder. Refinance rates are not the same for everyone. They depend on a few different factors. These include your credit score, how much you borrow, and how your loan size stacks up against the item’s value. You can use our refinancing tool to see how these things affect your rate. The key takeaways.

• There are a few common credit-related challenges people face. One is hard credit checks, also called hard inquiries. Another is refinancing a loan from a fixed to variable rate.
• If you’re having a hard time with money, lenders often add extra fees. These extra charges get tacked on to what you already owe them.
• Gathering all the required paperwork takes a lot of time. That’s a really big challenge to deal with.
• If you don’t feel motivated to do extra work, you might run into behavior issues.
• Every loan starts with a set of basic ground rules. Those original ground rules will decide exactly what problems pop up.

FAQ

What is personal loan refinancing?

Refinancing a personal loan means taking out a brand new loan. You use this new loan to pay off your existing personal loan. People do this on purpose to get better terms. You might get a lower interest rate, for example. Or you could get a more flexible plan to pay the money back. Industry experts say this move saves borrowers money. It also helps people manage their debt much more effectively. Our Refinancing Basics analysis breaks down this process. We explain how credit scores and income impact refinancing too.

How to decide if refinancing a personal loan is right for you?

Start by looking at your income and how much debt you have. You could get lower interest rates if your credit score went up after you took out your first loan. A 2023 SEMrush study found better credit scores usually mean better refinancing terms. Check if your income is steady and consistent. Also, see if refinancing will lower how much debt you have compared to your income. If you want more details, check out our Approval Criteria section.

How to refinance a personal loan step – by – step?

1. First, figure out all the things you need to pay for. Add up how much all of those things cost in total. Use that number to work out how much money you need to borrow.
2. If you can, try to make your credit score better over time.
3. Compare rates from other lenders first. Try to find the lowest possible rate you can get. Credit Karma recommends these steps. They will boost your odds of a successful refinance. Our Refinancing Process section has detailed guidance to help you.

Refinance vs Consolidate: What’s the difference?

Refinancing a personal loan means swapping your current loan for a new one. This new loan usually has better terms. Debt consolidation is different. It combines several separate debts into a single loan. Unlike consolidation, refinancing only focuses on one loan. If you have just one personal loan with a high interest rate, refinancing might be your best option. Our Key Concepts Analysis provides more details.