You can refinance a personal loan! Borrowers can choose to apply for a loan refinance. Although, eligibility for a loan refinance depends on the lender and the qualification requirements.
Refinancing means replacing an existing loan with a new one with different repayment terms. To refinance your personal loan, you must apply for a new loan online or in person. Borrowers can refinance with their existing lender or work with a new one. You will have to submit a new loan application and undergo a credit check, just like you did for your current loan.
Borrowers refinance their personal loans for various reasons. If the interest rate is too high, refinancing with a low-interest personal loan can make it easier for you to afford monthly payments. Some personal loan borrowers refinance to switch from a variable to a fixed interest rate. Refinancing could help you obtain a more considerable loan amount for significant purchases or projects. A loan refinance can make it easier to pay off your personal loan and other debt obligations.
The qualification requirements for a personal loan refinance depends on the financial situation. But typically, most lenders will take into account your credit score, income, existing debt, and payment history. If your credit score has improved since you applied for the existing loan, you can expect to get better loan offers. High credit scores can help you get lower rates, higher loan amounts, and longer repayment lengths.
If your credit has decreased since you applied for the existing personal loan, don’t stress just yet! You may still be able to refinance a personal loan. Applying for a new loan with a cosigner can help you get loan approval. A cosigner reduces the lending risk because in the event you cannot pay back the loan, the cosigner can make payments. You can also look for bad credit loan options!
There are personal loan options made explicitly for borrowers that have bad credit. The qualification requirements are more flexible, so more people have access to quick emergency cash. As long as you have the ability to make on-time payments each month, you may qualify to refinance a personal loan!