Today's Word of the Day:

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Definition: The act or process of replacing an existing loan or debt obligation with a new one—typically to obtain a lower interest rate, change the repayment term, switch from variable to fixed rate, or access cash value.

Origin: From re- (“again”) + finance (“to fund, manage money”), from French financer (“to pay, settle a debt”), from finance (“payment, settlement; revenue”), ultimately from Latin finis (“end, settlement, payment of a fine”).

Usage: After interest rates dropped, she pursued refinancing to reduce her monthly payment and shorten the loan term.

and: The company used refinancing to extend its debt maturities and improve near-term cash flow.

Quote: “Refinancing has become the lifeline for borrowers trying to stay afloat.” — Gretchen Morgenson, 2008

Misuse: Incorrect: “I’m refinancing my credit score next month.” (You refinance a loan or debt, not a credit score.)