[Glossary](https://pecuvo.eu/en/glossary/) · Credit and debt # Refinancing **In short:** refinancing is paying off an existing loan with a new one — usually at a lower cost, with a different term or on easier terms. **Simply put:** a new lender (or the same one) repays the old debt and you then pay under the new contract. It can save money if the new APR is lower. But fees, early repayment compensation and a longer term can eat up the saving. **Example:** you have €10,000 left over 36 months at 20 % — instalment €371.64. A new loan for the same term at 6 % — €304.22. You save €67.42 a month, €2,427.12 in total; if the new loan has €200 in fees, €2,227.12 remains. **Watch out:** compare the total amount payable before and after, not just the instalment. A lower instalment over a longer term often means more interest. **The EU rule:** total or partial refinancing is among the forbearance measures in Directive (EU) 2023/2225, Article 35(1), from 20.11.2026. > **Example: Bulgaria** — Consumer Credit Act, Article 32a(4): refinancing is among the restructuring measures for borrowers in difficulty. > > **Check in your country** — Ask for both offers in writing and compare the total amount payable. **Source:** Pecuvo Module 23, Chapter 3; Directive (EU) 2023/2225 — https://eur-lex.europa.eu/eli/dir/2023/2225/oj ## Related terms - [Debt consolidation](https://pecuvo.eu/en/glossary/debt-consolidation/) - [Early repayment](https://pecuvo.eu/en/glossary/early-repayment/) - [APR (annual percentage rate of charge)](https://pecuvo.eu/en/glossary/apr/) - [Payment holiday and restructuring](https://pecuvo.eu/en/glossary/payment-holiday/) - [Debt avalanche and debt snowball](https://pecuvo.eu/en/glossary/debt-avalanche-and-snowball/)