Consolidating Debt through Refinancing

By Jessica Love | NMLS# 506836

Refinancing involves replacing an existing loan with a new loan that works better for you. Your new loan should have a lower interest rate and a term that meets your needs.

Unlike other types of debt consolidation, refinancing involves trading one loan for a different, better loan. Consolidating with a    or credit card balance transfer often means rolling multiple loans into a different, better loan.

Many kinds of loans, including mortgages, car loans and student loans, can be refinanced—possibly saving you thousands of dollars. And people don’t just refinance to get a better interest rate. Your primary reason to refinance might be to get a longer term that lowers your monthly payment or a shorter term that helps you pay off your loan sooner.

To determine which consolidation method best fits your life, consider talking to an expert such as a credit counselor. UW Credit Union offers free credit consultations and appointments with other knowledgeable professionals—financial specialists and student lending experts, for example—who can help you learn about refinancing.