Refinance your personal loan: compare lower rates

When refinancing a personal loan makes sense

Three changes make a refinance worth pricing. Your credit file is cleaner than when you took the loan out, so a lender will place you lower in its range than the rate you are on. The rate you are paying sits well above what the same lenders publish now: Westpac's median of 16.99% p.a. is a long way above its 7.29% floor, and CommBank's fixed range runs from 7.25% to 22.25%. Or a fixed term is ending and the loan is about to sit on a rate you did not choose.

It rarely pays with only a few months left, because there is not enough interest left to save. It also fails when the only way to get a lower repayment is a much longer term. Run the remaining interest on both loans, then subtract the fees. Moneysmart's guide to debt consolidation and refinancing makes the same test: a lower repayment is not the same as a lower cost.

A rough screen, not a rule: if you can cut the rate by at least a couple of percentage points and you have more than a year left, ask the current lender for a payout figure and price one alternative. Under a year, or a gap of less than a point, the fees usually win.

Break and exit fees: do the maths

Personal loans are mostly fixed, so the expensive fee is not always a flat dollar amount. On 10 October 2026 these are the early repayment terms the lenders published on their own personal loan pages.

CommBank's early repayment adjustment on a fixed loan is calculated, not a menu price, so the payout letter is the only reliable number. Variable loans at CommBank and ANZ publish no fee to repay early, which is one reason a variable loan can be cheaper to leave later even when today's rate is similar. NAB's $250 application fee is waived on applications started 8 October to 3 December 2026, and Great Southern Bank waives its $225 establishment fee on applications to 23 February 2027. A waiver on the new loan can be the difference between a switch that saves money and one that does not.

Add the fees to the new balance only if the lender does. Westpac adds its $250 establishment fee to the loan, so you pay interest on it. A broker can put the payout figure, the new comparison rate and the fees in one total before you sign.

Fixed versus variable

CommBank publishes both an unsecured fixed range (7.25% to 22.25%, comparison 8.65% to 23.53%) and a variable range (6.99% to 21.99%, comparison 8.40% to 23.28%), each on $4,000 to $50,000 over one to seven years. NAB lets you choose fixed or variable inside 7.50% to 22.00%. ANZ prices a fixed or variable loan on your credit score and may charge an early repayment cost on the fixed loan only.

Fix when you want the repayment to stay put and you expect to hold the loan for most of the term. Choose variable when you expect to repay early, or you want the option to refinance again without an early repayment adjustment. The comparison rate is still the figure to line up, because a lower interest rate with a $15 monthly fee can lose to a slightly higher rate with no monthly fee. The comparison rate guide shows how that figure is built, on $30,000 over five years for personal loans.

Refinancing one loan, or consolidating several debts

Refinancing replaces a single personal loan. Debt consolidation rolls several debts, usually credit cards, store cards and a personal loan, into one new loan. The demand overlaps, but the test is different. On a refinance you are comparing one rate with another. On a consolidation you are comparing the new loan with a blend of card rates, and the saving disappears if the cards stay open and get used again.

If you only have one personal loan, stay on this page and price the switch. If you have cards as well, read the consolidation guide and the worked example there before you add those balances. Rolling a card into a five-year personal loan can cut the repayment and increase the interest if you were going to clear the card in a year. Moneysmart lists the same trap.

A home loan top-up or refinance is a third path, and usually the cheapest rate, but it puts the debt against your home and can turn a three-year personal loan into a twenty-year mortgage. Use it only for a large balance you have a plan to clear. The home loan refinance pages cover that switch.

Refinancing with bad credit

A refinance needs the new lender to say yes. If your file is weaker than when you borrowed, the new rate can be higher than the one you are leaving, and the switch costs you money. If the file is cleaner, because defaults are paid and the existing loan has been on time, you may move down a range that previously priced you at the top.

Specialist personal loans sit well above the bank floors. Jacaranda Finance, read 10 October 2026, publishes 14.95% to 29.95% p.a. (comparison 30.98% to 46.50% on $10,000 over 36 months), with unsecured loans only to $15,000. That can still beat a card, and it can lose badly to the personal loan you already have. Price it against your current payout cost, not against a bank's advertised floor. The bad credit personal loans page lists who publishes an appetite for defaults, and the No Interest Loan limits that are worth checking first.

Self-employed applicants have a narrower list. ING's personal loan is not available to self-employed borrowers. Westpac asks self-employed applicants for 18 months in business, two months of business bank statements and last year's Notice of Assessment.

How to refinance a personal loan, step by step

Keep the term the same as the time you have left, unless you have a reason to change it, and do not add new spending to the refinance. A personal loan broker is paid by the lender, not by adding a fee onto your rate. The Credit Guide sets out how that introduction works.