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
- Is Google One of the Best Companies in America?
- This High-Yield Energy Opportunity Has Plenty of Room to Run
- What's the Best Big Oil Stock to Buy Today?
- What's Driving Subaru's American Sales Surge?
- What Makes the Toyota Camry America's Favorite Family Car?
- 1 Reason Ford Motor Company's Surge in China Will Continue