Change Personal Loan Term? Discover Relief Fast (2026)

Are you feeling trapped by the current terms of your personal loan? Perhaps your financial circumstances have changed, or you’ve discovered a more favourable interest rate. Whatever your situation, the idea of changing the term of your personal loan might seem daunting, but it can be a viable solution to better align with your financial goals. Let's explore how you can navigate this process and make an informed decision.

Understanding How Personal Loan Terms Work

Personal loans are a popular financial product in Australia, designed to help you manage significant expenses or consolidate debt. Typically, these loans come with a fixed term, which is the period over which you agree to repay the loan. This term can range anywhere from 1 to 7 years, depending on the lender and your agreement.

Changing the term of your personal loan essentially means either extending or shortening this period. Doing so can impact your monthly repayments and the total interest you pay over the life of the loan. Understanding the workings of your current loan agreement is the first step towards determining if adjusting the term is right for you.

Current Market Rates and Options

In 2026, personal loan interest rates in Australia typically range from 6.49% to 12%, depending on factors like your credit score, income stability, and the loan amount. Some lenders on Esteb and Co's panel of 83+ lenders may offer competitive rates or flexible terms that can be advantageous if your current loan no longer meets your needs.

Before making any changes, it's crucial to compare the current terms of your loan with what's available in the market. Here's a useful comparison table to give you a snapshot of potential options:

These examples illustrate the variety of options you might encounter. By consulting with a mortgage broker like Esteb and Co, you can tap into this vast network of lenders to find a solution that best fits your circumstances.

Steps to Change Your Personal Loan Term

Ready to adjust your loan term? Here’s a step-by-step guide to help you through the process:

1. Review Your Current Loan Agreement: Understand the specific terms and conditions of your existing loan, including any fees associated with early repayment or term changes.
2. Assess Your Financial Situation: Consider your current financial health and future goals. Determine whether extending or shortening the term will better suit your needs.
3. Research New Loan Options: Use comparison tools and consult with brokers to explore new loan options that offer better terms or interest rates.
4. Contact Your Lender: If you wish to renegotiate terms with your current lender, reach out to them directly to discuss your options.
5. Apply for a New Loan: If a new loan from another lender presents better terms, proceed with the application process. Ensure you meet their eligibility criteria, which often include a stable income and credit score above 650.
6. Finalise the Change: Once approved, ensure all paperwork is completed and understand the new repayment schedule. Set reminders to help manage your new repayment obligations.

Tips and Considerations

Changing the term of your personal loan is not a decision to be taken lightly. Here are some expert tips to consider:

• Calculate the Total Cost: Use a loan calculator to estimate the total cost of your loan over the new term. This includes comparing the interest paid in both scenarios.
• Watch Out for Fees: Early repayment fees or loan establishment fees can add up. Make sure to factor these into your decision-making process.
• Consider Flexibility: Some loans offer the flexibility to make extra repayments or redraws. This can be beneficial if your income fluctuates.
• Stay Informed: Keep an eye on market trends and interest rates. Being informed can help you make timely decisions to manage your finances effectively.

Frequently Asked Questions

1. Can I change the term of my personal loan without refinancing?
Yes, some lenders may allow you to renegotiate the term without refinancing, but this can depend on your lender’s policies and your financial situation.

2. Will changing the loan term affect my credit score?
Changing the term itself doesn't impact your score, but applying for a new loan or missing repayments during the transition can.

3. How much can I save by changing my loan term?
The savings depend on the interest rate difference and term length. Use a loan calculator for precise estimates.

4. Are there any risks involved in changing my loan term?
Potential risks include incurring fees or increasing total interest paid over time if you extend the term.

5. What documents do I need to provide to change my loan term?
Typically, you’ll need proof of income, identification, and your current loan agreement details.

6. Can a mortgage broker help me find better loan terms?
Absolutely. A broker like Esteb and Co can access a wide range of lenders to find the most suitable option for you.

Changing the term of your personal loan doesn't have to be overwhelming. With careful planning and the right advice, you can align your loan with your financial goals, potentially saving money and providing peace of mind.