Can You Refinance a OneMain Loan? Everything You Need to Know

Refinancing a loan can be a great way to save money by getting a lower interest rate. But is it possible to refinance a OneMain personal loan specifically? Let’s take an in-depth look at whether and how you can refinance a OneMain loan.

What is OneMain Financial?

OneMain Financial is one of the largest personal loan lenders in the United States They provide personal loans ranging from $1,500 to $20,000 to borrowers with fair credit or better. OneMain Financial has over 1,500 branch locations across 44 states where you can apply for a loan in person You can also apply online or over the phone.

OneMain personal loans typically have origination fees of 4-10% and APRs of 18-35.99%. While these rates are higher than some other lenders, OneMain Financial specializes in lending to borrowers with less-than-perfect credit. So they provide an important source of financing for those who may not qualify elsewhere.

Can You Refinance a OneMain Personal Loan?

The short answer is yes you can refinance a OneMain personal loan. However there are a few key things to understand

• You cannot refinance a OneMain loan with OneMain. OneMain Financial does not offer loan refinancing or consolidation services for existing OneMain loans

• You’ll need to refinance with another lender. To get a lower rate on your OneMain loan, you’ll need to take out a new personal loan with a different lender and use it to pay off your OneMain balance.

• Your credit and finances must have improved. To qualify for refinancing at a lower rate, you’ll generally need to show a credit score improvement and/or increased income compared to when you originally got the OneMain loan.

Now let’s look at the step-by-step process for refinancing a OneMain personal loan.

How to Refinance a OneMain Personal Loan

If your goal is to get a lower interest rate to reduce your monthly payments and overall loan cost, here is how you can go about refinancing a OneMain personal loan:

1. Check your credit score

The first step is to check your current credit score. Online services like Credit Karma and WalletHub allow you to access your scores for free.

Your credit score plays a big role in the new interest rate you can qualify for when refinancing. So checking your score gives you an idea of what rates you may be offered.

In most cases, you’ll want your score to be significantly higher now compared to when you first got the OneMain loan. A credit score improvement shows lenders that you’ve become a less risky borrower.

2. Shop around with multiple lenders

Next, you need to compare loan offers from multiple lenders to find the best deal. Good options to consider include:

• Online lenders like LendingClub, Prosper, Upstart, and Best Egg
• Credit unions
• Banks and financial institutions like Wells Fargo and Discover

Be sure to get prequalified by several lenders. Prequalifying is a soft credit check that shows what rates you qualify for without affecting your credit score. It allows you to compare real loan offers side by side.

Look for the lowest APR loan that you qualify for based on your credit score and financial details. This will provide the most interest savings when you refinance.

3. Formally apply for a new loan

Once you’ve identified the lender with the best offer for your situation, it’s time to submit a formal loan application.

You’ll provide information like your income, employment, monthly expenses, and loan amount requested. The lender will do a hard inquiry on your credit report.

Make sure to only submit one application. Comparing prequalification offers first allows you to avoid unnecessary hard inquiries.

4. Get approved and receive your new loan funds

If approved, it takes about 1-7 business days to receive your new loan funds, either via direct deposit or a paper check. Be sure to verify the payoff amount needed to settle your OneMain balance and close that account.

5. Pay off and close your OneMain loan

As soon as the new loan disbursement comes through, pay off your OneMain balance immediately. This may require mailing a paper check, making an electronic payment, or visiting a OneMain branch.

Be sure to get written confirmation that your OneMain loan has been paid in full and the account is closed. Keep this for your records along with your new loan paperwork.

6. Begin repaying your new refinanced loan

You’ll now make monthly payments to the new lender based on the refinanced loan terms. Be sure to make all payments on time going forward to keep your credit score trending upward.

Alternative Ways to Refinance a OneMain Loan

In addition to a new personal loan, here are a couple other ways you may be able to refinance and save money on a OneMain personal loan:

Balance Transfer Credit Card

Many credit cards offer 0% intro APR balance transfer promotions. If you have good credit, you may qualify to transfer your OneMain loan balance to a card like this.

You’d then have 12-18 months to pay off the balance interest-free before the regular APR kicks in. Just be sure to have a payoff plan and budget in place.

401(k) or Home Equity Loan

If you have sufficient savings in accounts like a 401(k) or home equity, you may be able to borrow from those funds at a lower interest rate. This can essentially serve as a refinance of your OneMain debt.

Just be cautious when mixing personal loans with retirement or home equity accounts – make sure you can handle the required repayments.

Tips for Refinancing a OneMain Personal Loan

Here are some important tips to keep in mind if refinancing a OneMain Financial personal loan:

• Refinancing only makes sense if you get a significantly lower interest rate to make it worthwhile. Ideally your new APR should be at least 2-3% less.

• Focus on improving your credit score as much as possible before applying to refinance. This will help you qualify for the lowest possible new rate.

• Watch out for prepayment penalties. OneMain loans sometimes charge fees if you pay off the balance early. Ask for any penalties to be waived if you can.

• Be conservative when estimating your monthly payment ability for the refinanced loan. You want to be sure you can handle the new required payment.

• Refinancing restarts the loan term. So if you had a 3 year OneMain loan, refinancing may reset it back to another 3 year payoff timeframe.

• Carefully compare origination fees and other costs when shopping different lenders and loans. Low rates aren’t the only factor.

Pros and Cons of Refinancing a OneMain Personal Loan

Let’s summarize some of the key pros and cons to weigh:

Pros

• Lower interest rate saves you money over loan repayment term
• Reduced required monthly payment if rate drop is significant
• Shows positive credit management by improving loan terms

Cons

• Origination and other fees on new loan can offset interest savings
• Hard inquiry for new application may cause short term credit score drop
• Lengthened payoff timeframe if new term is reset
• No guarantee of being approved for refinancing

Overall if you’ve improved your financial standing, refinancing with a lower APR lender can be a smart move to reduce the cost of your OneMain personal loan. Just be sure the terms and fees make sense for your situation.

Alternatives to Refinancing a OneMain Loan

If refinancing isn’t the right option, here are a couple alternatives to consider:

• Credit counseling – Non-profit credit counseling provides advice on managing and repaying debt. They may be able to negotiate lower payments or interest rates on your OneMain loan.

• Debt management plan – A DMP provides structured repayment for multiple debts. The counselor can disburse one monthly payment to your creditors, potentially helping you save on interest.

• Debt settlement – Debt settlement involves negotiating a lump sum payoff that’s less than you owe. This requires a lump sum payment and only makes sense if you can settle for at least 50% less than the full balance.

• Bankruptcy – Filing for bankruptcy stops collections and can eliminate or discharge the OneMain loan balance. This heavily damages your credit but gives you a fresh start if you truly cannot repay.

The Bottom Line

Refinancing a personal loan from OneMain Financial can potentially help you save a lot of money on interest charges. But you’ll need to qualify for a new loan from a different lender at a lower rate.

Your best course of action is to:

1. Check your current credit score

2. Research new loan options and lenders

3. Compare prequalified offers to find the lowest rate

4. Formally apply and get approved for the best loan

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