Refinancing refers to the process of replacing an existing loan with a new one, typically with better terms, such as a lower interest rate or longer repayment period. [Loan: money borrowed from a lender that must be paid back with interest]
For example, if someone has a mortgage loan with a high interest rate, they may choose to refinance their loan by obtaining a new mortgage with a lower interest rate. This can help them save money on their monthly payments or reduce the overall cost of the loan.
Very Simple Definition:
Refinancing means replacing an old loan with a new one that is better, like with lower interest or more time to pay.
For example, if someone has a loan with high interest, they can get a new loan with less interest to save money.