You can get money when you refinance a loan, but it depends on which type of loan you’re refinancing. For example, a cash-out refinance on a mortgage allows you to pocket the difference between your refinanced loan amount and the original amount you owed on the mortgage.
The amount you can get with a refinance is determined by the equity you have in your home. With a cash-out refinance, you get a lump sum of money when you close on the loan, which you’ll use to pay off your previous mortgage balance. Any remaining funds can then be used for anything you want.
For other types of loans, the refinance amount is typically the same as the amount owed, so you won’t be able to get any money out of it. Instead, refinancing a personal loan or an auto loan is done to lower the monthly payments or get a lower interest rate.
This answer was first published on 04/04/23. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.
