Also called: Refinancing
Refinance
A refinance is replacing an existing facility with a new one, either with the same lender or a different one. It is used to lower a rate, extend or shorten a term, release equity, or consolidate several debts into a single facility.
What is a refinance?
A refinance is replacing an existing facility with a new one, either with the same lender or a different one. It is used to lower a rate, extend or shorten a term, release equity, or consolidate several debts into a single facility.
Example
Refinancing three equipment contracts totalling $180,000 into one 48-month facility to reduce the combined monthly repayment.
Why it matters
Extending the term usually lowers repayments but increases the total interest paid, and break costs may apply on the old facility.
Where you will see it
Business debt consolidation loan, Equipment loan, Commercial property loan