refinancing

Refinancing, in its most common form, actually stemmed from home loans and mortgages. It literally transfers an existing, outstanding loan to another obligation of debt, but instead, bearing different terms, usually more favourable to the customer.

Think of it this way – you owe bank “A” $1000 with a 5% interest rate, per month, to be paid over a period of 12 months. However, you stumble upon a repayment plan that only garners a 3% monthly charge. Lets just call that company “B”

What a typical consumer might’ve done in this situation, is to engage the services of company “B” in order to pay off all outstanding debts to bank “A,” thus in the process, continuing your loan repayment on company “B’s” terms instead, which could have probably saved you some money in the long run.

The same applies to vehicle refinancing, albeit there are other factors to take into account which will of course, be explained below.