 TITLE: What Happens to Interest Rates During a Recession? CONTENT: Should I Refinance During a Recession?\n--------------------------------------\nIf you can qualify for a new loan, refinancing your debts while interest rates are low could decrease your monthly payments and save you money. While there are pros and cons to each option, refinancing your mortgage, auto loan or student loans might be the smart move.\n*   **Refinancing mortgages:** Due to the amount of money involved, refinancing a mortgage could lead to significant savings. However, you may need to pay closing costs on your new loan and prepayment penalties to your current lender. As a result, it could take several years to break even and benefit. Consider the cost and savings, and whether you're likely to stay in the home for long enough to make refinancing worth it.\n*   **Refinancing auto loans:** Auto loan refinancing generally doesn't require closing costs, which can make it easier to determine if refinancing is a good idea. But still look out for prepayment penalties on your current auto loan or other fees that could eat into your potential savings.\n*   **Refinancing student loans:** Student loans don't have prepayment penalties, and many private lenders don't charge origination fees. If you currently have private student loans and can refinance into a lower-rate loan, it may be a good idea. But refinancing federal student loans isn't as straightforward. You'll need to refinance with a private loan and will lose federal benefits, such as access to hardship options and forgiveness programs.\nThere are also some factors that apply to every type of debt. For instance, even if you get a lower interest rate and decrease your monthly payment, if you increase your repayment term, you may wind up paying more interest overall.\nWhile refinancing is generally described as replacing a current loan with a new loan of the same type, you could also look into consolidating credit card debt with a personal loan while interest rates are low. Some personal loans have origination fees, but the loans may have much lower rates than credit cards and the fixed monthly payment can make it easier to stay on track and pay off the debt. END