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 New Hampshire, 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 lead to lower monthly payments and simplified finances, especially when consolidating multiple debts into a single loan. The process is governed by state statutes and federal laws that regulate lending practices, interest rates, and consumer protections. For instance, the New Hampshire Banking Department oversees the licensing and regulation of lenders within the state, ensuring they comply with applicable laws such as the New Hampshire Consumer Credit Code. Additionally, federal laws like the Truth in Lending Act (TILA) require lenders to provide clear and conspicuous disclosures about the terms and costs of loans, which helps consumers make informed decisions when refinancing. Borrowers considering refinancing should carefully evaluate the terms of the new loan, including any fees or penalties, and may benefit from consulting with an attorney to understand the legal implications of their refinancing agreement.