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
- 20 Smart Ways to Save Money
- Want to Pay Off Your Mortgage Early? Not So Fast
- Magellan Midstream Partners: Fantastic Business, Bad Investment Today
- 3 Reasons Pioneer Natural Resources' Stock Could Rise Again
- These 2 Oil Companies Have Bypassed The U.S. Export Ban: Which Should You Choose?
- Solar is Disrupting the $2 Trillion Energy Industry: This CEO Tells You How