What does it mean to refinance a business loan?

2 min read

Replace old debtWhat it is

Lower costGood reason

Not to delayThe trap

What it means

Refinancing swaps your current borrowing for a new facility, often to secure a lower rate, reduce monthly payments by extending the term, or roll several debts into one. It differs from restructuring, which changes the terms of an existing loan with the same lender. Check any early-repayment charge on the old loan first — it can eat the saving.

When it makes sense

Refinance when the new total cost is genuinely lower, or when consolidating a stack of loans into one affordable payment simplifies your position — model it with the consolidation calculator. The trap is refinancing repeatedly to lower payments while extending the term, quietly increasing the total you repay. Compare on total repayable, not the monthly figure.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.

Frequently asked questions

Does refinancing hurt my credit?

A new application involves a credit check, and closing and opening facilities shows on your file. Handled sensibly and not too often, the impact is minor and can be outweighed by a healthier, more affordable debt position.

When is refinancing a bad idea?

When you are only doing it to lower monthly payments by stretching the term, without a lower rate — you end up paying more overall. Or when it delays facing an unaffordable debt that needs advice, not refinancing.