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What does it mean to refinance a loan?

Were you asking your self 'what does it mean to refinance a loan?'

Nicholas Hinrichsen - Published: September 8, 2020

If you want to think about refinancing a loan, its basically getting a new loan to replace your old loan (whether its a car or a home). This is how it works mechanically:

  • You apply for a loan based on your home or car's value
  • The new lender approves the loan
  • The new lender pays off your old loan
  • The new lender now holds the title or deed to your home or automobile
  • You stop paying the old lender and start paying the new one

Often you can save money on your loan refinancing through:

  • Lengthening the term of the loan
  • Finding a lower interest rate

Haven't explored refinancing yet?
WithClutch.com is a fully digital platform that lets car owners like you do so from the comfort of their own home. No need to set a foot in a bank or credit union. You can lower your rate or get cash in as little as 20 seconds.

Follow three simple steps to refinance your auto loan, get approved in seconds and save thousands in minutes.

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