WordValerefinance
replacing a loan with a new one on different terms
In more detail
1. (verb) to borrow money again to pay off an earlier loan, usually at better terms or a lower interest rate
2. (verb) to arrange new financing for something you already own
Examples
- 1. They decided to refinance their mortgage when interest rates dropped.
- 2. The company refinanced its debt to reduce monthly payments.
How to use refinance
Refinance is used in financial and banking contexts to describe replacing an existing loan with a new one, typically to obtain better terms. It is most common when discussing mortgages and consumer debt. The term is practical and non-emotional, focusing on the financial mechanics rather than the borrower's circumstances.
Common phrases
- refinance a mortgage
- refinance a loan
- refinance at a lower rate
- refinance your home
- refinance student loans
Synonyms
remortgage · reborrow · restructure the debt · take out a new loan
Word family
refinancing (noun) · refinanced (adjective) · refinancer (noun)
A common mistake
Learners sometimes confuse refinancing with simply paying off a loan early; refinancing specifically involves taking out a new loan to pay off the old one, not just making extra payments.
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