By replacing your current loan with a higher-value loan and by taking out a portion of the equity you have, a cash-out refinance helps you to tap into the equity of your home.
For instance, if you have a mortgage of $200,000 and equity worth $50,000 it means that you still owe $150,000 on the loan.
You can accept a new loan for $170,000, and in a few days after closing your lender would give you the cash difference of $20,000.
Because you need money to pay off other debts you might seek a cash-out refinance.
If your debts are spread over multiple accounts, then a cash-out refinance can be used to consolidate the debts to a lower interest rate, pay off each account, and transition to one monthly payment.
With consolidation, you can keep a better record of what you owe and avoid instances of missed payments, late fees, and overdraft charges.