jälleenrahoitus

Jälleenrahoitus, known in English as refinancing, is the process of replacing an existing loan with a new loan, typically under different terms. This is commonly done with mortgages, personal loans, and business loans. The primary goal of refinancing is usually to obtain more favorable loan conditions, such as a lower interest rate, a shorter repayment period, or to change the loan type.

When an individual or business refinances, they essentially take out a new loan to pay off the balance of their old loan. The new loan will then have its own set of terms, which are negotiated with a lender. Interest rates are a key factor; a lower interest rate can significantly reduce the total cost of borrowing over the life of the loan. Refinancing can also be used to consolidate multiple debts into a single, more manageable payment, often with a lower overall monthly cost.

The decision to refinance depends on various factors, including current market interest rates, the borrower's financial situation, and the terms of the existing loan. While refinancing can offer significant savings, it also often involves fees, such as origination fees, appraisal fees, and closing costs. Therefore, it is important to carefully calculate whether the potential savings outweigh these costs before proceeding with a refinance. Lenders may also require a credit check and a new loan application, similar to when the original loan was taken out.