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
- 6 Dividend Stocks Every Retiree Should Consider Owning
- November's Worst Sector ETFs
- 6 Terrible Uses for Your Home Equity Line of Credit
- Battle of the Billionaires: How Jeff Bezos and Blue Origin Just Trumped Elon Musk's SpaceX
- Cliffs Natural Resources in 2015: Why It's Fallen 68%
- Ferrari Edges Closer to Separation From Fiat Chrysler