Refinance

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DEFINITION of 'Refinance'

1. When a business or person revises a payment schedule for repaying debt.

2. Replacing an older loan with a new loan offering better terms.

INVESTOPEDIA EXPLAINS 'Refinance'

When a business refinances, it typically extends the maturity date. When individuals change their monthly payments or modify the rate of interest on their loans, it usually involves a penalty fee.

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  1. What are the best ways to pay off my mortgage quickly?

    There are two main strategies for paying off a mortgage more quickly, which can be used alone or in tandem: making larger ... Read Full Answer >>
  2. When would a corporation want to refinance its debt?

    Favorable market conditions or the strengthening of a company's credit rating may lead to the refinancing of corporate debt. ... Read Full Answer >>
  3. What is each party's role in a reverse repurchase agreement?

    There are two principal parties in a reverse repurchase agreement. The first party, often called the seller, is offering ... Read Full Answer >>
  4. What risks does the dealer (lender) in a reverse repurchase agreement take on?

    In a conventional repurchase agreement, or repo, the dealer is the borrower and takes on similar risks to borrowers in other ... Read Full Answer >>
  5. In what instances does a business use closed end credit?

    The most common types of closed-end credit used by both businesses and individuals are mortgages and auto loans. Businesses ... Read Full Answer >>
  6. What are the long-term effects of delinquent accounts?

    Delinquency occurs when borrowers fail to make payments on their loans. All loan borrowers should do their best to avoid ... Read Full Answer >>
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