Refinance. Refinancing is the process of replacing an existing loan with a new loan.
Often the new loan is at a lower interest rate reducing the cost of the loan.
Typically one refinances by filling out an application for a new loan. The borrowed funds are then used to pay off the old loan. But note that some loans charge extra fees for prepayment of the loan. These charges can make refinancing more costly than expected.
Related Fool Articles
Recent Mentions on Fool.com
- Run, Don't Walk, From These Sketchy Dividend Stocks
- How Close is Advanced Micro Devices Inc. to Bankruptcy?
- Refinancing: Timing Is Everything
- 3 Key Facts About Kinder Morgan's Dividend Future That You Need to Know Now
- First American Financial Rides First-Quarter Refinances to an Earnings Beat
- Starbucks Corporation Shares Surge to Record Highs, But Is It Too Late to Invest?