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Definitions of finance terms:
refinancing
Definition
Paying off an existing loan with the proceeds from a new loan, usually of the same size, and using the same property as collateral. In order to decide whether this is worthwhile, the savings in interest must be weighed against the fees associated with refinancing. The difficult part of this calculation is predicting how much the up-front money would be worth when the savings are received. Other reasons to refinance include reducing the term of a longer mortgage, or switching between a fixed-rate and an adjustable-rate mortgage. If there are prepayment fees attached to the existing mortgage, refinancing becomes less favorable because of the increased cost to the borrower at the time of the refinancing.
In business accounting, ownership equity is the owners' interest in all assets after all liabilities are paid. There is a greater discussion at shareholders' equity (when the owners are shareholders). Ownership equity is also known as equity, risk capital, and liable capital.
In a bankruptcy court, creditors have the first claim on assets, and ownership equity is the last or residual claim against assets, paid only after all other creditors are paid.
In real estate the owner's equity in a property is the difference between the market price of a property and the owner's mortgage debt, or the owner's 'home equity loan'.
Debt Consolidation
The action of combining several loans or liabilities into one loan. Put another way, debt consolidation is the process of taking out a new loan to pay off a number of other debts. Most people who consolidate their debt are usually doing it to attain a lower interest rate, or the simplicity of a single loan. Also known as a "consolidation loan".
Investopedia Says: This is common among companies or people with credit problems (maxed-out credit cards, car loans, student loans, etc.), who combine all their debts into one loan to create greater ease in repayment. In the case of credit card debt, this can often be advantageous since credit cards generally carry a high interest rate.
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