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What Is Refinancing?

By Matthew Frankel, CFP – Updated Nov 13, 2025 at 12:33 AM EST

Key Points

Refinancing replaces existing debt with a new loan, often to secure better interest rates or terms.
Cash-out refinancing allows borrowing more than owed for expenses like home improvements.
Consider refinancing if long-term savings outweigh the initial costs involved.

Refinancing is a financial strategy in which a borrower uses one debt to pay off and replace other debt. In this article, we’ll take a look at what refinancing is, some of the common reasons why borrowers choose to refinance, and how to determine whether refinancing your debts might be a good idea.

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Debt Consolidation

Combining multiple debts into a single loan, usually with lower interest rates, simplifying payments and reducing costs.

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How to Consolidate and Refinance Your Student Loans

Student loan consolidation allows you to roll your student loans into one, but it's not the same as refinancing.

How to Calculate the Cost of Debt Pre-Tax

For investors, it's important to know how much a company has to pay in interest in order to maintain its debt.

Student Debt in Retirement: What You Should Know

What you need to know about retiring with student debt.

How to Calculate Return on Investment (ROI) in Real Estate

Learning how to calculate a return on investment in real estate can help you see if a property investment is worthwhile.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst specializing in the real estate and financial sectors. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, Globe St, The National Desk, and other TV networks and publications for his real estate, financial, stock market, and investing expertise.

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