Best Banks to Refinance Your Personal Loan in 2025 – Save Money & Improve Terms
Refinancing a personal loan can be a smart financial move if you want to reduce your interest rates, lower monthly payments, or adjust your loan term. However, choosing the right lender can be overwhelming, especially with so many options available in 2025. Banks, credit unions, and online lenders all offer refinancing options, but which ones provide the best terms for your unique situation?
In this guide, we’ll break down the best banks for refinancing personal loans in 2025, explaining how personal loan refinancing works, what to look for in a lender, and answering some frequently asked questions. By the end, you’ll be equipped with the knowledge to make an informed decision.
What Is Personal Loan Refinancing?
Personal loan refinancing involves replacing your existing loan with a new one, typically with better terms such as a lower interest rate, more favorable repayment terms, or reduced monthly payments. You can refinance a variety of loans, from credit card debt to existing personal loans.
Why Refinance a Personal Loan?
There are several reasons why people refinance personal loans:
1. Lower Interest Rates: If market rates have dropped or your credit score has improved, refinancing could help you secure a better rate and save money in the long run.
2. Lower Monthly Payments: Refinancing allows you to extend your loan term, which can lower your monthly payment and give you more room in your budget.
3. Improve Loan Terms: You may want to change the terms of your loan to fit your financial goals better. Whether it’s shortening the loan term to pay it off faster or extending it to reduce payments, refinancing gives you flexibility.
While refinancing can be a wise financial strategy, it’s important to shop around and find the right lender. Below are some of the best banks offering personal loan refinancing in 2025.
Top Banks for Refinancing Personal Loans in 2025
1. LightStream
✔ Best for: Borrowers with excellent credit
✔ Interest Rates: Starting at 5.49% APR
✔ Loan Amounts: $5,000 to $100,000
✔ Loan Terms: 24 to 84 months
✔ Fees: No fees or prepayment penalties
LightStream, a division of SunTrust Bank, is renowned for offering low-interest rates on personal loan refinancing. If you have excellent credit, you can enjoy some of the best rates available. LightStream has a Rate Beat Program, meaning they’ll beat a competitor’s rate by 0.10% if you find a better offer. This makes LightStream an excellent choice for those who qualify.
2. Wells Fargo
✔ Best for: Borrowers seeking flexible loan terms
✔ Interest Rates: Starting at 6.49% APR
✔ Loan Amounts: $3,000 to $100,000
✔ Loan Terms: 12 to 84 months
✔ Fees: No application fees or origination fees
Wells Fargo offers competitive rates on personal loan refinancing, especially for those looking for flexible loan terms. With no application or origination fees, Wells Fargo gives borrowers an easy, hassle-free refinancing experience. The lender also provides a relationship discount if you have an existing Wells Fargo account.
3. SoFi
✔ Best for: Borrowers looking for additional perks
✔ Interest Rates: Starting at 5.99% APR
✔ Loan Amounts: $5,000 to $100,000
✔ Loan Terms: 24 to 84 months
✔ Fees: No fees
SoFi is known for offering some of the lowest interest rates and best customer service in the personal loan refinancing space. SoFi offers unique benefits for borrowers, such as career coaching, financial planning advice, and unemployment protection if you lose your job. SoFi is an excellent option for those who value more than just a good interest rate.
4. Discover
✔ Best for: Borrowers with a good credit score
✔ Interest Rates: Starting at 5.99% APR
✔ Loan Amounts: $2,500 to $35,000
✔ Loan Terms: 36 to 84 months
✔ Fees: No origination fees
Discover offers some of the lowest APRs in the industry and provides a simple, straightforward application process. They don’t charge any origination or prepayment fees, and you can check your rate without affecting your credit score. Discover is a great choice for those who want an easy refinancing experience and no hidden fees.
5. Marcus by Goldman Sachs
✔ Best for: Borrowers seeking fixed-rate loans
✔ Interest Rates: Starting at 6.99% APR
✔ Loan Amounts: $3,500 to $40,000
✔ Loan Terms: 36 to 72 months
✔ Fees: No fees or prepayment penalties
Marcus by Goldman Sachs stands out with its fixed-rate loans and no fees for loan refinancing. The lender is ideal for borrowers who want to avoid fluctuating interest rates and prefer consistent payments. With competitive rates and a simple online application process, Marcus offers an excellent refinancing solution for most borrowers.
How to Qualify for Personal Loan Refinancing
Qualification criteria vary by lender, but here’s a general list of requirements you’ll need to meet:
1. Credit Score: Lenders usually require a minimum score of 600 to 640, though the best rates are reserved for those with scores above 700.
2. Loan Amount: Most lenders will refinance loans with balances starting at $3,000 or higher.
3. Debt-to-Income (DTI) Ratio: Lenders prefer a DTI ratio under 40-50%, meaning your monthly debt payments should be no more than half of your income.
4. Stable Income & Employment: Most lenders require proof of stable income, typically in the form of pay stubs or tax returns.
5. Payment History: You should have a solid history of on-time payments on your current loan to improve your chances of approval.
Pros and Cons of Refinancing Personal Loans
✅ Pros
Lower interest rates and better terms
Reduced monthly payments or a faster payoff option
Flexible loan terms to match your financial situation
No fees or hidden costs with certain lenders
❌ Cons
You may have to extend the loan term to reduce payments, which could result in paying more interest over time.
If you don’t qualify for a low-interest rate, refinancing may not save you money.
Some lenders have strict credit score requirements or may charge fees for late payments.
FAQs About Personal Loan Refinancing
1. Can I refinance my personal loan if I have bad credit?
Yes, some lenders, like Marcus by Goldman Sachs and SoFi, offer refinancing options to those with less-than-perfect credit. However, you may face higher interest rates.
2. How long does it take to refinance a personal loan?
The process typically takes anywhere from a few days to a couple of weeks, depending on the lender. Some lenders allow you to check your rate in minutes and finalize the process quickly.
3. What is the minimum credit score for refinancing a personal loan?
Most lenders require a minimum credit score of 600–640, but the best rates are available to those with 700+ credit scores.
4. Should I refinance my personal loan?
If you can secure a lower interest rate and reduce your monthly payments, refinancing can be a great option. However, make sure to compare lenders and review the terms to ensure it’s the best move for your finances.
Final Thoughts & Call to Action
Refinancing your personal loan can be a smart way to save money and adjust your loan terms. By comparing top banks and lenders, you can find the best rates and terms that suit your financial needs.
Ready to refinance? Compare your options today and take control of your loan payments! Whether you want to lower your interest rate or adjust your loan term, refinancing can provide the relief you need.
