Refinance Calculator

What is Loan Refinancing?

Loan refinancing is the process of replacing an existing loan with a new one, typically to secure better terms. This commonly applies to mortgages, auto loans, and student loans. If collateral is involved, it can be transferred to the new loan. Debt restructuring refers to renegotiating delinquent debts under financial distress.

Reasons to Refinance

Refinance Mortgages

Different types of mortgage refinancing offer various benefits:

Type Description
Cash-Out Refinance Refinance with a higher loan amount to receive cash from the equity.
FHA Refinance Refinance an FHA loan to a conventional loan after reaching 20% equity to avoid mortgage insurance premiums.
Rate and Term Refinance Refinance to a lower interest rate or different loan term.
ARM Refinance Refinance an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.

Mortgage Refinance Costs

Refinancing mortgages may incur fees such as application fees, appraisal costs, origination fees, title search, and other document preparation charges.

Refinance Student Loans

Refinancing student loans converts them from federal to private loans, losing federal loan benefits. It may be beneficial for private loans, Grad PLUS, or Parent PLUS loans with higher interest rates. Consolidation is different and combines federal loans into one.

Refinance Car Loans

Refinancing car loans can extend the loan term, reducing monthly payments but increasing overall interest costs. Beware of "upside-down" loans where the amount owed exceeds the car's value.

Refinance Credit Cards

Credit card debt can be refinanced by opening a balance transfer card with a low introductory APR or consolidating into a debt consolidation loan.

Refinance Personal Loans

Refinancing personal loans may secure a lower interest rate or different repayment period if the borrower's financial situation has improved.