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Refinancing a personal loan: Key benefits and how it works

The article from Moneycontrol discusses the benefits and mechanics of refinancing a personal loan. Refinancing involves replacing an existing loan with a new one, typically to secure a lower interest rate, reduce monthly payments, or change loan terms. Key benefits include potential savings on interest, especially if credit scores have improved since the original loan was taken, allowing for better loan terms. It also mentions that refinancing can help consolidate debt, manage finances better by lowering monthly outgoings, and possibly switch from a variable to a fixed interest rate for more predictable payments. The process involves evaluating current loan terms, shopping for new loan offers, calculating the cost of refinancing (including any fees), and then applying for the new loan. The article advises considering the overall cost-effectiveness of refinancing, taking into account any prepayment penalties or fees associated with the existing loan, and ensuring that the new loan's terms are indeed more favorable.

Read the Full moneycontrol.com Article at:
[ https://www.moneycontrol.com/news/business/personal-finance/refinancing-a-personal-loan-key-benefits-and-how-it-works-12879749.html ]