Glossary
Replacing an existing loan with a new one, typically to secure a lower interest rate, reduce monthly payments, or change the loan term.
In depth
Refinancing can save money when market rates drop or when your credit has improved since the original loan was taken out. However, restarting the loan clock means paying interest longer, and origination fees on the new loan must be factored in. Harbor Lenders works with participating lenders where refinancing options may be available — check options with no hard credit pull to see what rates may be accessible to you.
FAQs
Refinancing typically makes sense when your credit has improved significantly, interest rates have dropped, or you need to lower your monthly payment. Calculate the break-even point: how long until savings from a lower rate exceed the cost of any new origination fee.
Refinancing typically involves a hard credit pull from the new lender, which may temporarily lower your score by a few points. Checking options through Harbor Lenders does not trigger a hard inquiry.
Related terms
Annual Percentage Rate (APR)
The total yearly cost of borrowing, expressed as a percentage. APR includes the interest rate plus any lender fees, making it a more complete comparison tool than interest rate alone.
Read more →Loan Term
The length of time you have to repay a loan, typically expressed in months. Common personal loan terms range from 12 to 60 months.
Read more →Origination Fee
A one-time fee charged by some lenders to process a loan. It is typically deducted from the loan proceeds or added to the loan balance.
Read more →Personal Loan
An unsecured installment loan that can be used for almost any purpose. Repaid in fixed monthly payments over a set term.
Read more →One secure request. No hard credit pull. No cost to check.