Refinancing, as some call it refining, is when you redo a new loan to pay off an old loan and receive change. As the name implies, re(redo) financing (new loan), but with the obligation to pay off the old loan.

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Typically, refinancing is done when you have already paid an amount of loan installments that exists. Thus, you can take out a new loan with the same installment amount that will be greater than the outstanding balance of the old loan. As the new amount is greater than the outstanding balance of the old loan, there will be an amount left that will be credited to your account. It is worth mentioning that the refinancing renews the terms, that is, the client pays back the loan from the beginning.