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Refinancing Your Personal Loan

Is it time to consider refinancing your personal loan?


A personal loan can be a lifeline during financial challenges, helping you achieve various goals or manage unexpected expenses. However, as financial situations evolve, you may find that your current personal loan terms no longer suit your needs.

Refinancing your personal loan is a strategic financial move that can help you lower interest rates or fees, reduce monthly payments, or consolidate debts.

Explore why you might want or need to refinance personal loans, the options available, and how Cash Today’s personal loans can be valuable for securing better terms.

Updated by Steve Stemp on 26/14/24

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Why You Might Want or Need to Refinance Your Personal Loan

  • Lower Interest Rates on personal loans: Over time, your credit score may improve, or market interest rates may drop. Refinancing can secure a lower interest rate, or reduce monthly fees, potentially saving you money on interest payments with a new loan.
  • Lower Monthly Payments: Extending the term of your personal loan when you refinance can lead to smaller monthly repayment options, which can ease your monthly budget.

  • Change in Financial Situation: Life is full of unexpected changes. If you experience a shift in your financial situation due to job loss, medical expenses, or other factors, refinancing can help you adapt your personal loans to your current needs. An example is changing from a variable interest rate to a fixed rate to budget more accurately.

  • Debt Consolidation: Refinancing your personal loans can be an excellent way to consolidate multiple high-interest debts into a single, manageable monthly payment that reduces monthly fees, simplifying your financial life.

  • Access to Equity: If you’ve built equity in assets or investments, you can access it by refinancing your personal loan. This cash can be used for various financial goals.

Options for Refinancing Your Personal Loan

  • Traditional Personal Loan Refinancing: This approach involves finding a new lender willing to offer better terms and paying off your existing personal loan.

  • Cash Today Personal Loan: Cash Today provides personal loans up to $80,000, allowing you to refinance your current personal loan. You can use the personal loan to pay off your existing loan and potentially secure a better interest rate or reduce ongoing fees.

  • Term Adjustment: Adjusting the loan term during refinancing can help tailor your monthly payments to your financial goals. You can opt for a longer term to reduce your monthly payments or a shorter term for quicker repayment.

  • Credit Score Improvement: Improving your credit score can help you access more competitive loan offers when refinancing. A better credit score can lead to lower interest rates and better terms on finance.

Cash Today’s Personal Loans – Personal Loan Refinancing

Cash Today’s personal loans offer a flexible and convenient solution for refinancing your existing personal loan. With loan amounts of up to $80,000, these loans provide the financial freedom needed to pay off your current personal loan and potentially secure better terms with lower fees.

You can streamline your financial life by consolidating your existing personal loan and other debts into one manageable monthly payment.

Cash Today loans ensure a straightforward application process, competitive interest rates, and flexible repayment options. Some loans offer the option for you to make extra repayments if you so choose.

Whether you’re seeking to lower your interest rate, reduce your monthly payments, or access equity for other financial needs, Cash Today’s personal loans can help you achieve your financial goals.

What is refinancing?

Refinancing is the process of replacing an existing loan with a new one, typically with more favourable terms. This can involve obtaining a new loan from a different lender to pay off the original loan or renegotiating the terms of the existing loan with the same lender.

The primary goal of refinancing is to obtain better terms, such as a lower interest rate, lower monthly payments and fees, more favourable terms such as a lower fixed rate as opposed to a variable rate, or a shorter loan term.

Refinancing can also be used to consolidate multiple loans into a single loan or to access cash by tapping into the equity built up in an asset, such as a home or car.

Overall, refinancing can help borrowers save money, reduce their monthly fees and other payments, or achieve other financial goals.

Should you refinance your personal loan?

Deciding whether to refinance your personal loan depends on your individual financial circumstances and goals, and the types of loans you wish to refinance. Perhaps you would like to find a better rate for car loans, medical loans, or other types of unsecured loans.

Refinancing may be a good option if you can secure a lower interest rate than your current loan, which could result in lower monthly payments and potentially save you money over the life of the loan. Choosing reputable lending partners is also important.

Additionally, the value of refinancing may become clear if you want to consolidate multiple debts or multiple loans into a single loan, simplify your finances, or extend the repayment term to reduce your monthly fees. Many borrowers aren’t aware that they can save money by consolidating loans and only paying one monthly fee.

However, it’s essential to consider any fees or charges associated with refinancing, such as origination fees or prepayment penalties, as these could offset any potential savings. You also want to ensure that you will be able to make repayments on time for any new loan.

Ultimately, it’s essential to carefully weigh the pros and cons of refinancing and consider how it aligns with your long-term financial goals before making a decision and signing a loan agreement. You might want to look for personal loan products with flexible repayment frequency, a good comparison rate, and user-friendly application process.

Consulting with a financial advisor can also provide valuable guidance in determining whether refinancing is the right choice for you and the best options for getting a better deal with finance.

Does refinancing a personal loan hurt your credit score?

Refinancing a personal loan in Australia can impact your credit score, but the effect may not necessarily be negative. There are a few things to consider when looking into the effects on your credit score.

When you apply for refinancing, the lender will typically conduct a credit check, resulting in a hard inquiry on your credit report. This hard inquiry can cause a slight decrease in your credit score temporarily.

However, the impact of refinancing on your credit score depends on various factors, including how you manage the new loan including making regular payments.

If you successfully repay the new loan on time and in full, it could demonstrate responsible borrowing behaviour. This could potentially have a positive impact on your credit score over time.

On the other hand, if you miss payments or default on the new loan, it could significantly damage your credit score.

Additionally, closing the old loan account as part of the refinancing process may affect your credit utilization ratio and the average age of your credit accounts, which are also factors that influence your credit score.

Ultimately, whether refinancing a personal loan hurts your credit score depends on how you manage the new loan and your overall credit history.

It’s essential to weigh the potential benefits and risks of refinancing and carefully consider your financial situation before making a decision.

How often can you refinance a personal loan?

In Australia, there isn’t a strict limit on how often you can refinance a personal loan, but it’s essential to consider several factors before refinancing multiple times.

Refinancing too frequently can indicate financial instability to lenders and may have adverse effects on your credit score. Typically, lenders prefer to see that you manage your money well and have a stable repayment history with responsible financial behaviour. To be approved for loans with low rates, a strong financial position will have a positive impact.

If you refinance a personal loan too frequently, it may raise concerns about your ability to manage debt effectively. Additionally, each refinancing application usually involves a credit inquiry, which can temporarily lower your credit score.

While there’s no set rule on the frequency of refinancing, it’s crucial to assess your financial situation and review personal loan features carefully before considering it.

Evaluate whether the benefits of refinancing to get a better deal, such as obtaining a lower personal loan interest rate, better loan terms, or the option to make additional repayments, outweigh any potential drawbacks, such as early repayment fees.

Additionally, consider alternative options, such as improving your credit score or negotiating with your current lender for customisable repayment schedules, before pursuing refinancing again.

Will I get approved?

Requirements for a refinance loan:

  • Age of 18 years or older
  • Bank accounts showing consistent income from paid employment has been deposited into your bank account (confirmed via 90-day online bank statement verification during the application process)
  • Identification such as your driver’s licence or other form of ID
  • Proof of residency (utility bill)
  • No direct debit dishonour transactions in bank statements
  • Good credit rating
  • Affordability of repayments

Reasons your loan may NOT be approved

  • You have opened a personal loan in the last 90 days
  • You already have more than two or more payday loans under $2000
  • Your bank statements in the last 90 days display transactions for online gambling
  • Your bank statements show payments made to collection companies or payment arrears or dishonours in the last 90 days
  • Your bank statements show wage advances such as Wagetap, Wagepay, MyPayFast, Beforepay, in the last 90 days
  • Bankruptcy
  • A credit score of less than 300

Personal Loans Refinancing Summary

Refinancing your personal loan with a Cash Today loan offers an array of benefits, from saving money on interest payments to adapting your loan terms to your current financial situation.

Whether you aim to lower your personal loan interest rate, ease your monthly budget, or consolidate debts, Cash Today’s personal loan refinance options could help you make the most of your financial journey and get funds paid fast.

If you’re considering refinancing your personal loan, explore your options, including Cash Today’s personal loans, to find the best solution for your unique needs and goals.

Click below to find the right refinance loan between $5000 and $80,000 today and get the best rates from our panel of Australian lenders.