There are several situations where you may consider refinancing a personal loan. You might need access to more funds, for example, or want to merge multiple debts. Or, more simply, you could just be ready for a better deal.
Whatever your circumstances or reasons for refinancing your personal loan, it’s good to consider all your options so that you make the decision that’s best for you.
1. Merging multiple debts
If you have multiple debts – perhaps across two or three credit cards as well as an existing personal loan, for instance – and would like to consolidate them all into one debt, then refinancing may be a smart option. By consolidating all your debts you’ll only have to make one regular repayment, which can help you manage your cash flow better. You may also be able to save on interest and administration fees.
2. Accessing more funds
You might need to borrow more money than you originally thought when you first took out your personal loan. If this is the case you may not need to refinance your personal loan – you could just apply to increase your personal loan amount instead. Keep in mind though that this may also increase your repayments and loan term.
3. Changing your loan
Working out which part of your personal loan you’d like to change is a good starting point when assessing whether or not refinancing is suitable. With CommBank personal loans you can alter your repayment amount and due date through NetBank or the CommBank app – so there’s no need to refinance or take out a new loan.
If you’re looking to change your loan provider or reduce the amount of interest you’re paying, refinancing may be suitable. Before entering into any new deal with a new lender, make sure the new loan has all the features that are important to you.