Hva Betyr Refinansiering: Everything You Need to Know

When we’re saddled with a lot of debt and feel stuck, it can be really hard to know what to do about it.  It can feel overwhelming, honestly, to know that we’ve got so much on our shoulders and seemingly no way to mitigate that stress.  However, thankfully, that’s not quite the case anymore.  Now, we’ve got a lot more options available to us when we’re in need of some assistance financially.

This remains the case for something like loans, it’s easy to assume that there aren’t really many options out there other than declaring bankruptcy, which certainly isn’t something that anyone wants to do.  It’s definitely a last resort type of thing, and when we have to go through it, it can be catastrophic for our emotional well-being as well as our long-term financial health.

What can we do when this sort of thing happens, then?  Well, it’s a bit complicated, but it’s well worth the effort involved.  Today, we’ll primarily be focusing on refinancing, since that is one of the most popular methods of debt management around these days.  

There’s a good chance that you’ve already heard of it, though perhaps not in this context.  Most of the time, when we hear “refinancing,” our mind probably drifts towards mortgages and auto loans.  Admittedly, it is true that more often than not, those are the types of loans that people decide to refinance.

However, the process is certainly not limited to that.  Despite that common misconception, there are ways to refinance pretty much any type of loan.  So, if you’re interested in learning how that works, do make sure to keep reading.

What is it?

First, let’s go ahead and tackle the main question here: what is refinancing?  You can get a brief description of it here: https://www.creditkarma.com/lp/pl-loan?adcopy=18938822611_147226l.  However, because there’s so much to cover, it’s hard to rely on just one resource.

Another word for it is “refi,” though it’s not as common of a phrase anymore.  Putting it simply, refinancing involves replacing a previous loan or credit agreement with a new one that has better terms.  So, you’re basically buying out your previous debt and replacing it with a new one instead.

Seems strange to do at first glance, right?  It certainly does seem rather counterproductive to get yourself in “more debt” to help mitigate the stress of it.  However, the key thing here is that the goal is to alter the terms of an original contract.  

In that way, it is a viable option for helping people who are in debt, even though it doesn’t look that way initially.  Once you learn more about it, though, it will make a bit more sense.  

Why Refinance?

Next, we can take a look at some of the reasons that people decide to go through this process.  Naturally, there are few motivations behind it, so you may not necessarily resonate with all of them.  That being said, we can categorize most of them into two sorts of goals: wanting to have more money right now, or to save in the long-term on the payments.  

Keep in mind that these are quite different goals, so you often won’t be able to accomplish both at once.  Still, though, that’s pretty much the only “downside” that comes with the territory here, and it’s hardly the end of the world.  You’ll just have to take some time before you apply for a refinancing loan to consider what your current financial goals are.  

How it Works

When you decide to søke refinansiering, there are a few things that you’ll want to keep in mind moving forward.  There are several different types of refinancing, and each of them tends to serve a certain purpose and fit into a specific niche.  It’s good to be familiar with all of them, though, in case you aren’t exactly sure what direction you want to go in yet.

Cash Out

This one is perhaps the most common, as it’s the type that allows us to almost immediately have more money in our pockets.  However, it is generally reserved for mortgages, and comes with some risk.  The idea here is that if you’ve got an asset like a property that’s gained value but you don’t want to wait for that value to hit your wallet, you can use a loan to get that additional money right away.

Unfortunately, this does tend to result in some additional fees that can be quite frustrating to deal with, so it’s not going to be for everyone.  More often than not it’s a tool utilized by investors or house flippers rather than “consumers.”



Cash In

This one is pretty much the opposite of the previous one, although that’s probably not much of a surprise given the names.  When you decide to do cash-in refinancing, you’re paying off a portion of the loan that you’ve currently got.  This results in a lower monthly payment, which is often the goal for this type.


For folks who have a lot of debt, this is usually what they go for.  When you decide to do consolidation refinancing, it involves combining several different loans into one balance with one singular monthly payment.  This condenses the number of bills and payments that you need to keep track of in a given month, for one thing.

Additionally, it provides borrowers with an opportunity to get a lower interest rate on several different credit agreements at once.  This is why so many take advantage of this type.  While sometimes it can involve higher fees and the works, it often turns out to be worth it in the long term.

Rate and Term

Rate and term refinancing is the type that has been covered already in this article.  So, it’s when you get a new loan to cover the costs of an old one to get a new contract and better terms for yourself.  It’s the easiest to learn about and understand, and probably the one most popular with ordinary borrowers because it isn’t limited to any specific types of loans.