Refinancing
Replacing an existing loan with a new one, usually at a better rate.
Refinancing means taking out a new loan to pay off an existing one, typically to secure a lower interest rate, change the term, or tap equity. It usually involves closing costs, so the key question is the break-even point: divide the upfront cost by the monthly saving to see how many months until refinancing pays for itself. If you will keep the loan past that point, it may be worth it.