Refinancing means replacing an existing loan (or credit card balance) with a new loan that has better terms - usually a lower interest rate or lower monthly payment.
People commonly refinance:
Credit card balances (using balance transfer cards)
Personal loans
Auto loans
Student loans
Mortgages
The credit score you need depends on what type of loan you’re refinancing and each lender's unique requirements. Here are some general guidelines:
| Type of Refinance | Minimum Credit Score Needed | Ideal Score for Best Rates |
|---|---|---|
| Credit card balance transfer | 670+ | 700+ |
| Personal loan refinance | 580–600+ | 670+ |
| Auto loan refinance | 580–600+ | 670+ |
| Student loan refinance | 650+ | 720+ |
| Mortgage refinance | 620+ (conventional) | 740+ |
💡 Pro Tip: The better your score, the lower your interest rate - and that means bigger savings over time.
Let’s say you have a $10,000 personal loan with a 5-year term.
| Your Credit Score | Estimated APR | Monthly Payment | Total Interest Paid |
|---|---|---|---|
| 580 | 28% | $311 | $8,680 |
| 660 | 18% | $254 | $5,240 |
| 720 | 10% | $212 | $2,750 |
As you can see, improving your credit score can save you thousands of dollars in interest.
Yes, you can refinance with bad credit, but your options may be limited. You may:
Be offered a higher interest rate
Get approved smaller loan amounts
Need a co-signer or collateral
If your score is below 600, it’s smart to work on improving your credit before applying to refinance.
Refinancing can save you money, but don’t forget to factor in fees. These might include:
Origination fees: 1%–5% of the loan amount
Balance transfer fees: 3%–5% of the balance moved
Prepayment penalties: Some loans charge a fee if you pay off early (less common now, but still possible)
Example:
If you refinance a $10,000 loan and the lender charges a 4% origination fee, you’ll pay $400 upfront - or it may be taken out of your loan amount.
When you consider how much refinancing will save you on interest, make sure you subtract any fees from the total in order to make a fair comparison.
When refinancing, watch out for:
🚩 Lenders who "guarantee" approval
Reputable lenders always check your credit first.
🚩 Upfront fees before approval
It's illegal for debt relief or refinance companies to charge fees before delivering results.
🚩 Very short 0% balance transfer periods
Some credit cards advertise 0% interest, but only for a few months. You could get hit with high interest afterward.
🚩 Lowering your payment too much
A lower monthly payment might look nice, but it will extend the total time it takes to pay off your debt and could cost you more in interest over time.
Want better refinance offers? Here’s how to give your credit score a boost:
Pay on time – Even one late payment can hurt your score
Lower your credit card balances – Keep usage below 30%
Avoid opening new accounts too fast
Check your credit report for errors and areas for improvement (included in Payoff Genius Pro)
Refinancing can be a great way to lower your interest rate, reduce your monthly payment, and save money - especially if your credit score or the market rates have improved.
But it’s important to:
Check your credit before applying
Compare multiple lenders
Understand all terms and fees
So, what credit score do you need to refinance?
✅ 600–660+ is often enough to qualify
✅ 670–740+ will help you get much better rates
⚠️ Lower scores may still have options, but you’ll pay more
No matter your score, always read the fine print and avoid offers that seem too good to be true. If you’re unsure, it's worth it to do some extra research.