You can refinance a personal loan. This can be an especially smart strategy if your credit has improved significantly since obtaining your personal loan, or if market interest rates have generally declined.
For example, if you have a $20,000 personal loan at 10% interest with four years remaining on the term, and can obtain a new loan with 6% interest, using the latter to pay off your existing personal loan debt can save you more than $1,800 in interest.
Before you refinance a personal loan debt, be sure to check if your personal loan has a prepayment penalty, which is essentially a fee you’ll have to pay for paying the loan off sooner than the agreed-upon term.
Are credit cards or personal loans worse for credit?
