Compare your current personal loan with a proposed replacement loan. Enter the remaining balance and current loan details, then add the new rate, repayment term and any refinance fees. Review the estimated monthly payment change and the total cost of the two options to see whether refinancing could save money under your assumptions.
Refinancing lowers your payment by $29.38/mo and saves $757.71 in total lifetime borrowing costs.
Upfront fees of $300 are recovered in approximately 10.21 months (0.9 years) through monthly payment savings.
Use the outstanding payoff balance and the current loan's rate and payment information required by the calculator.
Add the new annual rate and repayment term offered by the prospective lender.
Indicate whether the fees will be paid upfront or added to the new loan balance, if that choice is supported.
Review the monthly payment, expected remaining repayments, fees and estimated net cost difference.
Refinancing a personal loan means replacing the existing loan with a new loan that pays off the remaining balance. The new loan has its own rate, repayment term, payment schedule and possible fees.
Borrowers may consider refinancing to seek a lower rate, change the repayment term, adjust their monthly payment or simplify their loan arrangements.
The outcome depends on the actual offer and the remaining cost of the current loan. A lower rate can be beneficial, but fees and a longer term can reduce or eliminate the savings. Refinancing does not guarantee approval or a better financial result.
A meaningful comparison starts with the loan balance still owed today, not the original amount borrowed when the existing loan began.
Compare the cash flows that remain under the current loan with those under the proposed loan. Account for the rate and repayment schedule, the new term, fees and how those fees are paid.
The current loan's remaining payment total can be different from the new loan's scheduled payment total. If refinancing extends the term, the smaller monthly payment may be offset by more payments over time.
Review both the change in monthly payment and the net cost difference under the calculator's stated assumptions.
Refinancing can change both the payment amount and how long the borrower remains in debt. These are related but different measures.
A lower rate or shorter term may reduce total borrowing cost, although a shorter term can increase the required monthly payment. A longer term can reduce the payment but extend the period over which interest is paid.
Use the results to answer two separate questions:
Do not judge a refinance using the monthly payment alone.
Refinancing may involve an origination fee or another charge. How the fee is paid affects the calculation: an upfront fee is a separate cash outflow, while a financed fee increases the amount being repaid through the new loan.
A simple payment-savings recovery period can divide upfront costs by the monthly payment reduction when that reduction is positive. This only shows how long it would take for the payment reduction to cover the upfront fees under the simplified assumption that the savings continue each month.
It is not automatically a full financial break-even measure. If a new loan has a longer term, the borrower may pay more overall despite a lower monthly payment.
Review the net cost result alongside any fee-recovery period, and confirm the fee treatment before relying on the comparison.
The following worked example illustrates the standard fixed-rate monthly model for an unsecured personal loan with an upfront refinancing fee:
| Metric | Current Loan | Proposed Loan | Difference / Impact |
|---|---|---|---|
| Outstanding Balance | $10,000.00 | $10,000.00 | — |
| Annual Interest Rate (APR) | 18.00% | 12.00% | -6.00% |
| Remaining Term | 36 months | 36 months | Same duration |
| Scheduled Monthly Payment | ~$361.52 | ~$332.14 | -$29.38 / month |
| Scheduled Payments Total | ~$13,014.86 | ~$11,957.15 | -$1,057.71 |
| Refinancing Fee (Paid Upfront) | $0.00 | $300.00 | +$300.00 |
| Fee-Inclusive Total Outflow | ~$13,014.86 | ~$12,257.15 | -$757.71 Net Savings |
| Upfront Fee Recovery Period | — | ~10.2 months | ($300 fee ÷ $29.38 savings) |
Under these assumptions, the proposed loan reduces the scheduled payment and produces a lower total outflow after the $300 fee. The figures are an illustration of a specified mathematical model, not an actual loan offer. Different fee treatment, rounding, payment timing and lender terms can change the result.
Refinancing is not automatically beneficial. A lower payment may result from extending the repayment term rather than reducing the total cost. Fees can also outweigh the amount saved from a lower rate.
For example, a proposed loan could have a much smaller monthly payment but cost more over its full repayment schedule because it lasts longer.
Before interpreting a comparison as a saving, check the remaining payment schedule, new term, total fees and total cost difference. The result depends on the actual loan details and the calculation's assumptions.
This calculator estimates a comparison from the loan inputs you provide. It does not provide a binding loan offer, approve an application, verify an actual payoff quotation or guarantee future savings.
Rates, fees, payment conventions and actual payoff amounts can differ from the assumptions used in the model. A fee-inclusive estimate may not match the lender's official APR disclosures. Review the new offer's terms and the existing loan's payoff amount before making a decision.
Results are estimates for comparison and educational purposes, not personalized financial or legal advice.
It compares an existing personal loan with a proposed replacement loan using the balance, rate, repayment schedule and relevant fees to estimate payment and cost differences.
Refinancing may save money when the new loan reduces the remaining cost after accounting for fees and the full repayment schedule. A lower rate alone does not guarantee savings.
No. A longer repayment term can lower the monthly payment while increasing the amount paid over time. Compare the full remaining cost as well as monthly payment.
Yes. An upfront fee adds to the cost of replacing the loan. If a fee is financed, the increased balance creates payments and potentially additional interest.
A simplified fee-recovery period divides upfront fees by positive monthly payment savings. That result should not be confused with a full total-cost comparison, especially when the new repayment term differs.
That depends on the lender's offer and its eligibility rules. A longer term can lower the scheduled payment but may increase the total cost. This calculator compares the stated terms; it does not determine approval.
No. It estimates outcomes from the figures entered and does not guarantee lender approval, an interest rate or savings.
Applying for a refinance triggers a hard credit inquiry, causing a small, temporary dip of a few points. However, consistently making on-time payments on the replacement loan and eliminating the old balance helps strengthen your credit history over time.
Most personal loan lenders require a minimum credit score of 580 to 660, with scores of 670 or higher qualifying for the most competitive interest rates and lowest origination fees. If your score has improved since the original loan, you may qualify for substantial rate savings.
Most modern personal loans do not charge prepayment penalties. However, you should always check your original loan agreement or request an official payoff statement from your current lender to verify there are no early payoff charges before refinancing.
Some lenders allow current borrowers to refinance or offer loyalty discounts, while others require you to take out a new loan with a different financial institution. Comparing offers from multiple lenders ensures you find the lowest overall borrowing cost.
Refinancing replaces a single existing personal loan with a new loan to secure a better interest rate, lower payment, or different term. Debt consolidation combines multiple separate debts—such as credit cards and multiple loans—into one unified monthly payment.
Calculate monthly payments, total interest costs, and full amortization schedules for newly borrowed unsecured personal loans.
Determine the true Annual Percentage Rate by accounting for upfront origination fees, points, and finance charges.
Inspect complete month-by-month and annual principal reduction and interest breakdowns across any term.
Evaluate combining multiple credit cards or high-interest balances into a single predictable monthly payment.
Looking to refinance real estate or calculate home loans? Use our dedicated mortgage calculator for property tax, insurance, and home equity details.