6 Steps to Refinance a Personal Loan From the Same Lender
When considering if you want to refinance a personal loan from the same lender, there are some steps you should take to make that decision. Refinancing may not be the right move for you at this moment. Taking these steps into consideration may help you determine if it is.
1. Make Sure Your in Good Financial Shape
You should check your credit first before doing anything else to make sure your refinance for a personal loan won’t be rejected. You may have an error on your credit report. While this is usually an easy fix, you don’t want to have errors on your credit. These can prevent you from getting loans, or other types of credit. You want to make sure that you aren’t carrying too much debt.
Be sure that your debt to income ratio is in a good place. If your employment isn’t stable, that could impact your ability to get a loan. If you hop from job to job, this can impact your loan worthiness. If you have too many different loans currently, most lenders won’t approve you for another. It appears to the lender that your income is coming from loans and not your income.
2. Compare Personal Loan Options With Your Lender and Others
Your current lender may not offer you the best refinance deal. When you refinance your personal loan from the same lender, you want to decrease your monthly payment, or the overall total amount you pay back. You may also want to decrease the length of time it takes you to pay back the loan. You should compare your current loan other options from the same lender. You should also compare what other lenders can offer. A different lender may give you a better offer.
3. Calculate Refinancing Cost (Beware of Fees other Fine Print)
When you refinance a personal loan from the same lender it comes with fees. You should be aware of the fees before you decide to refinance a personal loan with the same lender. Do not ignore the fine print. Read everything and make sure you understand what you are paying. Fees can add up to as much as 8% of the value of the loan. Some personal loan fees that you should look for are a one time application fee simply to fill out the application.
There are origination fees from some lenders. Make sure there is no early repayment fee. Some lenders charge you for paying the loan off early. Check to see if the lenders charges any other fees that may crop up unexpectedly, like a late payment fee. A lender may require loan insurance. Walk away from this lender. A personal loan is unsecured and does not require any type of insurance.