Financial emergencies often strike at the most unexpected times. Personal loans come as the best funding option during these times, but borrowers may not have enough time to research and select the best lender. Once they are out of the emergency, they may realise that they did not borrow the best personal loan in India in a hurry. That is when they may consider refinancing their existing loan. 

Refinancing means paying off an existing loan with a new loan to get better interest rates or simpler terms and conditions. Here is a quick guide to refinancing a personal loan in India.

Steps to Refinance a Personal Loan

Refinancing a personal loan entails the following simple steps:

1. Checking Loan Eligibility: A lender will refinance a loan only if the applicant has a consistent repayment history and a high credit score. Besides, they also look at other requisites like the applicant’s age, income, employment, DTI ratio, etc. An individual must fulfil the new lender’s eligibility conditions before proceeding with the refinancing.
2. Considering the Cost of Loan Refinancing: Lenders charge some amount while refinancing an existing loan. Considering these costs along with the part-prepayment charges is crucial before opting for a loan refinance. 
3. Applying for a Refinance: After finding a fair deal, the borrower can apply for a personal loan refinance. It entails filling up an application form, submitting the required documents, and selecting a repayment term using a personal loan calculator. Once the lender approves the application, the borrower can pay off the existing loan and repay the new loan’s EMIs with new terms. 

Choosing the best personal loan in India to refinance an existing loan is crucial in managing finances and maximising savings.

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