Refinancing

Debtor debt refinancing (re-crediting, re-crediting, re-crediting, loan repurchase) is the repayment of a loan obligation to a new creditor-bank or other financial institution, on the basis of new conditions or settling of credit obligations with the help of a new loan.

 

The objective of any loan refinancing is to obtain more favorable credit conditions and reduce the total cost of a loan. The refinancing of the loan is used on several occasions, however, the most common reason for refinancing is a situation in which, when being in one of the credit obligations, it is established that another creditor is able to obtain more favorable credit obligations on the basis of the same rules.

 

Refinancing is in fact a redeeming of the loan, so it is subject to all the same rules as the issue of a new credit. During the refinancing, a tripartite agreement is concluded - between the debtor and both, the former and the new creditor.