To Refinance or Not

To Refinance or Not

I went through the cover story of debt management which was quite informative. In the same article you have highlighted the concept of refinancing. According to you, when should we decide to refinance the loan or on what basis should we decide whether to refinance our loan or not?

- Sunil Ahlawat


Editor Responds : The basic idea of refinancing is that either it should reduce your net cash outflow with lower interest rate or it should help you in managing your liquidity. Hence, you can decide to refinance if the new interest rate is lower than the current rate. Besides, if you are facing a liquidity problem and not able to manage your cash flow, refinancing would be the best option.

 

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