Refinance Personal Loan

* Enquiring will not affect your credit score
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Refinancing a personal loan can be a great way to pay a lower total amount of interest and fewer fees or change your loan term. Before you refinance your loan, it’s important to understand the process and the costs involved.

Refinance a personal loan

Refinancing a personal loan

Refinancing a personal loan is a process where you take out a new loan to pay off an old loan, usually with a different lender. Generally, this is done to secure a better deal on the loan amount or consolidate debts into one simple loan. It's also an option to get better rates if you've previously agreed to a low-doc personal loan

No matter the reason for refinancing your personal loan, it’s always important to compare any new option you’re considering to your current loan to ensure the change will save you money and make your life easier.

Reasons to refinance a personal loan

Reasons to refinance a personal loan

You should always have a clear goal and a reason in mind before refinancing a personal loan. Here are some of the most common reasons for refinancing:

  • Lower rates — If you’ve had your personal loan for a while, chances are market rates have changed. If this is the case, you could secure a loan with low interest rates by refinancing. 
  • Lower fees — It’s a good idea to regularly compare your personal loan fees to those of other comparable loans. If you find your fees are higher than others, refinancing could save you money. 
  • Longer loan term — If you’d like a longer loan term and smaller monthly repayments, refinancing your personal loan could be a way to achieve this. But be careful — the longer your loan term, the more interest you’ll pay in total. 
  • Higher credit limit — The easiest way to access more credit is usually to request it from your current lender. But if that doesn’t work, refinancing your personal loan may allow you to access a higher credit limit. 
  • Better loan features — One reason to refinance your personal loan could be to secure a new loan with better features, such as lower fees or flexible repayments. The features must be suitable for your specific situation, such as saving you money and or making it easier to meet repayments. 
  • Debt consolidation — If you have existing debt tied up in many different loans, refinancing to consolidate those debts could help you save money and simplify your repayments. Learn more about your options when refinancing to consolidate personal loan debt
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Use the comparison rate to compare loans. This number is an expression of the true cost of a personal loan (interest + fees).

Personal loan refinance comparison

Personal loan refinance comparison

As an example, we’ve compared an existing personal loan with two refinancing options, each with five-year loan terms and $10,000 loan amounts.

Refinance personal loan example

Existing loanRefinance option 1Refinance option 2
Upfront FeesN/A$500$100
Monthly Fees$25$50$0
Monthly Repayments$228$225$205
Total Cost$13,666$13,523$12,410

In this example, it may not be worth refinancing to option A because, despite its lower interest rate, the loan saves you less than $150 over five years due to high upfront and ongoing fees. 

Personal loan refinancing option B on the other hand, has a higher interest rate but lower upfront and ongoing fees. This loan’s monthly repayment amount is $23 less than the existing loan and costs $1,256 less in total.

How to refinance a personal loan

How to refinance a personal loan

If you want to refinance a personal loan, the process is fairly straightforward. The most important aspect will be in taking your time to truly understand the costs of your existing debts, and an accurate comparison of any new loan and how you will benefit. 

You can refinance a personal loan in five simple steps:

1. Compare personal loans

You should regularly review personal loan offers on the market, at least every six months. If a personal loan comes up that could save you time and/or money, you’ll spot it and be able to refinance. Focus on interest rates, fees and loan flexibility when comparing your loan to others.

Use the Personal Loan Calculator to estimate repayments and compare various loan amounts.

2. Cost-benefit analysis

If you find a loan you think might be more suited to you, work out what refinancing your personal loan may cost you and compare it to what it will save you. Make sure you know whether your existing loan and new loan have any of the following fees that may add to the cost of refinancing:

  • Break fees
  • Early exit fees
  • Discharge fees
  • Application fees
  • Loan establishment fees 

If you find that refinancing your personal loan could save you money, consider whether the savings are worth the time it takes to refinance. If the difference is only small, it may not be worth the hassle.

3. Apply for the new personal loan

Once you’ve done your sums you’re ready to apply for your new personal loan. To do so you may need certain documents such as:

  • Identification: Passport, Australian driver licence. 
  • Proof of income and employment: recent payslips, tax returns and/or business financials. Details of debts: amounts of other loans and/or debts. 
  • Details of assets: details of any property, investments or other assets in your name. 
  • Proof of address: bank statement, utility bill, or phone bill issued within the last 90 days. 
  • Details of security: if you’re applying for a secured loan you’ll need to supply details of whatever asset you’re using for security. You may have to supply a dealer’s invoice or official registration certificate to prove ownership. 

You can apply for a refinancing personal loan with most lenders online, but some will require you to visit a branch.

4. Pay off the old loan

Some lenders will deposit the personal loan funds straight into your account. If this is the case make sure to pay off your old loan/s as soon as you receive the funds so that you’re not tempted to spend it. Other lenders will settle your old loans directly with the other lenders, saving you the trouble.

5. Review your options and compare again

When it comes to finance it often pays to take a proactive approach. After you’ve refinanced your personal loan it’s a good idea to keep comparing your loan to others on the market. If a better deal comes up you should always consider it (but keep in mind that refinancing too often may affect your credit score).

Refinance personal loan fees

New LenderExisting LenderBoth Lenders
Application fees
Loan establishment fees
Break costs
Settlement fees
Account management fees
Late repayment fees
Redraw fees

Interest is usually the largest cost of any personal loan, but fees come in a close second. It’s worth scanning any new loan product disclosure statement and checking out its comparison rate to make sure you know which fees you’ll be paying.

Who offers to refinance personal loans

Who offers to refinance personal loans?

There are several lenders who offer personal loans for refinancing, including traditional banks, non-bank lenders and credit unions. Most lenders offer easy online applications and fast approval. Each type of lender offering to refinance personal loans will have its own drawbacks and advantages.

Major banks

These are the traditional banks you see on TV with branches on high streets in Australian towns and cities — big names like Westpac, Commbank, ANZ and NAB. They often have strict credit policies and will assess your loan and your credit history very closely. 

If your credit history is poor or your income is low they may be less accommodating than other types of lenders.

Non-bank lenders 

Non-bank lenders are less often traditional and conservative than the big banks. They may have 100% online applications and credit policies that are less strict than traditional lenders.

Credit unions and customer-owned banks

Credit unions and other customer-owned banks are a little like traditional banks except they don't aim to turn a profit, all their proceeds go towards offering better services to their members, which sometimes means lower interest rates and fees.

Refinance personal loan summary


Refinancing a personal loan is the process of taking out a new loan to repay your existing personal loan. It can be a great way to switch to a new loan to save money, access new loan features, or consolidate debt. However, refinancing isn’t right for everyone. 

Before you refinance your personal loan you should:

  • Compare all your options, including those from traditional banks, non-bank lenders and credit unions. 
  • Compare the total cost of any loan you choose to your current loan to make sure the switch saves you money and makes your life easier.  

Once you’re approved and the funds are paid out, you’ll usually have to repay your other loans yourself, but in some cases, your new lender will settle the loans directly with your old lender.

Refinance personal loan FAQ

Can I refinance my personal loan with the same lender?

In some cases, yes. While your lender will inevitably prefer to keep you on your current loan rather than give you a better deal, they may allow you to refinance your loan in order to keep your business. That’s why if you’re considering refinancing it may be a good idea to approach your current lender after you’ve shopped around to see if they’ll match the best deals you find.

Is a fixed or variable interest rate better for refinancing a personal loan?

Whether a fixed or variable interest rate is best for you will depend entirely on your circumstances. For more information visit our guide to personal loan interest rates.

Can I refinance my personal loan with an unsecured loan?

Yes, many lenders offer unsecured personal loans that are ideal for refinancing. Keep in mind these may have higher interest rates than secured loans.

When is the best time to refinance a personal loan?

The best time to refinance your personal loan will depend on the specific loan you have and your circumstances, but generally speaking, any time may be a good time to refinance your personal loan provided the change saves you money or makes your life easier. Just keep in mind that it’s best not to refinance too often as applying for credit frequently may negatively affect your credit history.