All three deal with advances you already carry, but they change them in different ways. The right choice depends on how many advances you have, how heavy the payments are, and whether you want the old advances closed or kept.
Side by side
| Refinance | Consolidation | Reverse consolidation | |
|---|---|---|---|
| What happens to the old advance | Paid off and replaced with new terms | Several advances paid off and replaced with one | Left in place, new funding supplies cash to cover its payments |
| Number of payments after | One | One | The old payments continue, plus the new facility |
| Best when | One advance with a heavy payment | Several advances with overlapping payments | Temporary squeeze with a clear way out |
| Main risk | Longer term can raise the total repaid | Same, across more balances | You owe the old balances and a new obligation |
| Learn more | MCA refinance | MCA consolidation | Reverse consolidation |
How to choose
- One heavy advance: a refinance is the simplest.
- Three or four small ones: a consolidation removes the overlap.
- A short-term squeeze with a payoff in sight: reverse consolidation can bridge it, but it is the easiest to misuse.
Questions to ask in every case
- What is the total I will repay, and how does it compare with finishing my current advances?
- Is the payment lower because of a longer term?
- How much cash do I receive, if any?
- What happens to my existing agreements?
The steps for paying off an existing advance are in the payoff and buyout process.