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.

RELATED TERMS
  1. Debt Consolidation

    The act of combining several loans or liabilities into one loan. ...
  2. Rate And Term Refinance

    The refinancing of an existing mortgage for the purpose of changing ...
  3. Short Refinance

    The refinancing of a mortgage by a lender for a borrower currently ...
  4. Refinancing Risk

    1. The risk that an early unscheduled repayment of principal ...
  5. Refunding

    The process of retiring or redeeming an outstanding bond issue ...
  6. Cash-Out Refinance

    A mortgage refinancing transaction in which the new mortgage ...
RELATED FAQS
  1. 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 >>
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