Refinance
Refinancing replaces an existing loan with a new one, often to change the interest rate or term. It can reduce monthly payments or shorten repayment time.
Refinancing may involve closing costs and new underwriting. Borrowers often refinance mortgages, auto loans, or student loans. Some loans carry a prepayment penalty when refinanced.
Related Terms
Mortgage
A mortgage is a loan used to purchase real estate, where the property serves as collateral. The borr...
APR
Annual Percentage Rate
APR is the annual rate charged for borrowing or earned through investment, expressed as a percentage...
Interest
Interest is the cost of borrowing money or the return earned on deposited funds, typically expressed...
Prepayment Penalty
A prepayment penalty is a fee charged for paying off a loan early. It compensates the lender for los...
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