A revolving debt is as a cash reserve, accessible at any time, which is partially renewed over your repayments. Formerly known as “revolving debt” or “revolving credit”; the amount you have is determined by your repayment capacity and needs.
How to use the revolving debt?
You can use the revolving debt:
- Requesting the release in whole or part of the amount available to credit account to which it is attached. Operation is automatic (within the limits available) if your account is found in the open,
- By purchasing a “credit card” associated. Purchases and withdrawals made with the card will be charged from the amount of reserves available. However, by default, the cash payment of the card is activated. The use of credit card payment is only possible with your express consent.
You can also usually make direct transfers:
- Your revolving debt to your checking account to give you cash,
- Your checking account to the revolving debt to reduce your outstanding credit and / or to lower monthly repayments.
The duration of the revolving debt
The duration of the credit agreement is renewable for 1, renewable. The credit institution must:
- Annually review the file of payment incidents characterized.
- Three months before the renewal inform you of the conditions for renewal and repayment of the sums due. You can then oppose it until 20 days before their effective implementation by returning a reply slip for refusal.
- Every 3 years, check your credit in the same conditions as for the granting of credit.
If, during two consecutive years, the amount of revolving credit and payment partners is not used, the credit institution asks if you want to terminate the contract. He sends you a document that indicates the particular amount of available credit, the annual percentage rate, the amount of reimbursement by maturity and credit fractions used.
If you do not return this document (signed and dated) no later than 20 days before the date of the contract, the contract revolving credit is terminated. You are then required to repay to the prior conditions to the proposed amendments, the amount of the reserve money already in use.
The repayment of the revolving debt
The monthly statement revolving shows the estimated number of monthly payments due for full repayment of the amount borrowed.
Each repayment schedule includes a minimum amortization of capital outstanding. If the total amount is greater that certain limits;
You can ask at any time:
- Reducing the amount available
- Suspension of the right to use,
- Termination of the contract.
You are then required to pay under the conditions specified in the contract, the amount of the reserve used.
You can also request the conversion of revolving credit in your traditional credit during the annual renewal of the contract. The amount of reimbursement is fixed and then the end date is known.
At the place of sale and distance selling
The seller must complete a form with you to dialogue and information containing information to assess your creditworthiness.
The cost of revolving credit
It is generally more expensive than traditional personal loan.
Interests include only the amount used. The rate is in principle determined by the characteristics of your application, including the amount you want to have. Plus you get an important reservation; the greater the rate is advantageous.
Insurance is often optional. To open your reserve, most banks do not receive fees.
If you purchased a credit card attached to your revolving credit, its contribution is not included in the price of credit.
- Be careful using this debt. In case of payment difficulties, please contact your advisor quickly.
- You can request a deferment. However, it cannot be granted more than two times per year. During this period, you cannot use the revolving debt facility.
- If your account can no longer pay your monthly payments, your bank may require immediate repayment of the entire outstanding asset, accrued interest and late payment fees.