When you refinance a debt, you replace one debt with another debt. The goal of refinancing a debt is usually to secure a better interest rate and payment terms—such as lower monthly payments. You might also seek to consolidate some debts through refinancing by borrowing enough money from an existing lender to pay off some debts to other lenders (such as credit cards) and make one smaller monthly payment, rather than multiple monthly payments.

In Maryland, refinancing a debt involves taking out a new loan to pay off an existing one, often with the aim of obtaining a lower interest rate or more favorable payment terms. This can result in lower monthly payments and can also be used as a strategy to consolidate multiple debts into a single payment, making it easier to manage finances. When refinancing, it's important to consider the total cost of the loan, including interest rates, fees, and the length of the repayment period. Maryland law requires lenders to provide clear and comprehensive information about the terms of the loan, and there are consumer protection laws in place to prevent predatory lending practices. Borrowers should also be aware of their right to rescind certain refinance transactions within a specific time frame, typically three days, as provided by the federal Truth in Lending Act (TILA). It's advisable to consult with an attorney or a financial advisor to understand the implications of refinancing and to ensure that the new loan terms are in the borrower's best interest.