Making payments on a loan with suboptimal terms can make you feel trapped. Sometimes refinancing can help you find more suitable terms for the loan.

Essentially, refinancing replaces an old loan with a new one with terms that are better for your situation. But it’s not all fanfare and applause—there are tradeoffs associated with refinancing.

What Can Be Refinanced?

While mortgage loans may be most commonly refinanced, you can refinance auto, personal, and even student loans. You can even “refinance” credit card debt by transferring the amount left to pay to another credit provider with better terms or taking out a loan to pay off the debt.

Not all lenders will refinance your loan, though. Just like how you had to convince a lender that you were a good fit for your original loan, you’ll need to do the same when you refinance. Lenders will consider your income, credit history, and credit score.

Some types of loans involve extra consideration. Auto refinancing, for example, can be difficult since cars depreciate and lose their value quickly. A lender will be less likely to refinance your auto loan if the car is old, has high mileage, or isn’t worth enough for them to feel like it’s a safe investment.