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. 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. Why do commercial banks borrow from the Federal Reserve?

    Commercial banks borrow from the Federal Reserve primarily to meet reserve requirements when their cash on hand is low before ... Read Full Answer >>
  4. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>
  5. What are the typical repayment terms for a syndicated loan?

    The typical repayment terms for a syndicated loan are periods of three to six years for short-term loans or seven to 10 years ... Read Full Answer >>
  6. What is considered a reasonable interest rate for a syndicated loan?

    A 2010 survey of syndicated loans found an average interest rate of 7.9%. However, the majority of syndicated loans are floating ... Read Full Answer >>
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