Can You Refinance An Interest Only Loan?

Many have a doubt whether one can refinance an interest only loan. The answer is yes. Let's see how to do it.

How to Refinance an Interest Only loan:

Interest only loans are loans in which you need not pay the principal till the end of the interest only term. You pay the principal only if you wish to do so. The principal balance will not change during this term if you choose not to pay the principal.

Refinancing an interest only loan involves taking a low-interest loan and using it to pay off a current high-interest loan. As a result of this process, your interest burden will be reduced both in the short and long term. You can use the saved money for productive purposes, such as investing in shares, bonds or real estates. Of course, this kind of refinancing will be beneficial only if the current interest rate is lower than the interest rate of your current loan.

Interest only loan are very useful for those who have irregular income. Refinance your interest only loans wisely and save.

Improve Your Credit Score - Free Consultation