2 min read
The good reasons
Refinancing is sound when it genuinely lowers your cost — a better rate, or rolling a stack of expensive short-term loans into one cheaper facility. Freeing up cash flow can also be valid if the new total cost is reasonable. Check the before-and-after total repayable with the consolidation calculator.
The poor reasons
Refinancing only to lower the monthly payment by extending the term — without a lower rate — quietly increases what you repay overall. Worse is refinancing to delay facing debt the business genuinely can't afford; that needs advice, not more borrowing. Watch for any early-repayment charge on the old loan that could erase the saving.
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
When is refinancing worth it?
When it genuinely lowers your total cost or consolidates expensive debt into one cheaper, manageable facility. Always check the new total repayable beats the old one after any early-repayment charge, not just the monthly payment.
When is refinancing a mistake?
When it only lowers monthly payments by stretching the term without a lower rate, raising the total cost — or when it's used to delay debt the business can't afford. That situation calls for advice, not more borrowing.
Related reading
What does it mean to refinance a business loan?
Refinancing means replacing an existing loan with a new one — usually to cut the rate, lower payments or…
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When should I consolidate business debt?
Consolidate when combining debts into one facility genuinely lowers the total cost or the monthly outflow —…
Read →How do I work out the total repayable?
Total repayable is the sum of every payment you will make over the life of the facility — principal,…
Read →Can I apply for a loan to refinance existing business debt?
Yes — refinancing replaces existing debt with a single, often cheaper facility. Lenders assess the new total…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.