The best time to refinance a personal loan is when you’re offered a lower annual percentage rate. A lower rate can save you money by reducing the monthly payment and the total interest.

Here are two signals to check rates on personal loans and see if you qualify for a lower rate:

Stronger credit: If you’ve been making on-time payments toward your existing personal loan and other lines of credit over a few months or years, your credit may be in better shape than it was when you originally applied. Credit scores are a major factor in determining APRs, and the lowest rates go to those with good or excellent credit (690 or higher FICO).

Higher income, less debt: A lender may also offer a better rate if you’ve bumped up your income or paid down other debts to lower your debt-to-income ratio. Lenders typically like this number to be below 40%, but lower is better.

Personal loan refinance calculator

Use this calculator to see how much a lower APR will save in monthly payments and overall interest.

How to read your results

Monthly savings: This is how much extra room you’ll have each month in your budget if you refinance at the rate and term you’ve selected.

Interest savings: This is how much you’ll save in total interest on the loan.

Your current and refinanced loan: These are snapshots of the loans’ monthly payments, the total interest you’ll pay over each loan’s term and the amount you’ll have spent by the time you pay the loan off.

A refinanced loan that offers a lower rate with a longer term may reduce your monthly payment but will also cost more in total interest. A higher rate and a shorter term will lower your interest costs but increase your monthly payments.

To see both the payment and interest lowered, calculate a lower APR and the same term, or a term that isn’t much longer.

Lenders that let you refinance a personal loan

Lenders’ refinancing policies vary — some will refinance only their own personal loans, while others will only refinance loans from another lender.

Here are lenders with the best rates and their refinance policies:

Check your rate

The best way to see whether refinancing will save you money is by pre-qualifying, which gives a personalized rate without affecting your credit score.

Check your rate with multiple lenders by pre-qualifying through NerdWallet. The process usually takes a few minutes, so it’s a quick way to gauge whether it’s time to refinance.

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