What Is a Refinance?
A refinance, or "refi" for short, refers to the process of revising and replacing the terms of an existing credit agreement, usually as it relates to a loan or mortgage.
When a business or an individual decides to refinance a credit obligation, they effectively seek to make favorable changes to their interest rate, payment schedule, and/or other terms outlined in their contract.
If approved, the borrower gets a new contract that takes the place of the original agreement.
Borrowers often choose to refinance when the interest-rate environment changes substantially, causing potential savings on debt payments from a new agreement.
What are the benefits of Refinance?
Well, refinance can benefit you in many ways. Such as interest savings, cash out for business, working capital, restructuring your loan repayment and tenure, and many more.
These are a few benefits of refinance:
- Interest savings (If your current ELR is higher than the new offer now, you may consider for refinance to save up interest payment. You might not see the difference in short term, but over 35 years of tenure, a small amount give a big impact when you really calculate how much interest you have paid to the bank!) — check on your Amortization calculator to find out
- Cash out for investment, business, working capital, house fund (2nd house), children's education, travel funds, renovations, etc
- Loan consolidation (You may consolidate your credit cards, educational loans, personal loans, or other high-interest debt with your property）
- Restructure on loan package (If your loan package is a basic term loan, you can restructure to Semi flexi/Full Flexi account for more benefits and flexibility. Or you may structure your loan tenure, to shorten or to extend longer term for your loan repayment.)
Tips: When you found out that sometimes banks are offering [FREE MOVING COST] or [FREE LEGAL COST] packages. It's also good timing to sort out whether is it worth it to refinance your house for the above-mentioned benefits.
If you have any more questions, please contact our Advisor for more info.
