Refinancing
Refinancing means taking out a new loan to pay off credits you already have. Consolidating means doing it for several credits at once, so you are left with one loan and one monthly payment. In German you will see Umschuldung and Kreditablösung.
A new loan to pay off old ones is a new consumer credit, so the full credit check applies (KKG, Art. 27a and 28).
What it means for your loan
It can lower your monthly payment, your total cost, or both, but not always: a longer term almost always lowers the payment and raises the total. Compare what you would still pay on your current credits with what the new loan costs in total.
Explained in full
Refinancing and consolidating loans in Switzerland
Combining credits into one loan can lower your monthly payment and still cost more in total. How refinancing works in Switzerland, and when to get help.
Sources
- Bundesgesetz über den Konsumkredit (KKG), SR 221.214.1, Art. 1, 5, 6, 7, 9, 16, 17, 22, 24, 27a, 28 and 31Swiss Confederation, Fedlex, read on