Bearing other names revolving debt, permanent credit or cash reserve, the credit is a type of revolving consumer credit unaffected. In this context, the bank grants a loan to the borrower, which is not obliged to provide evidence of the use of the borrowed amount. Moreover, in the context of a request for revolving credit, the borrower is under no obligation to justify its application, specifying the object.
Another peculiarity of the revolving credit facility is based on the fact that it is renewable depending on its financial situation, the borrower has the ability to determine for itself the amount of credit requested. It is injected into the subscriber’s account, usually within 48 hours after confirmation of the credit application. When the recipient uses a portion of its cash reserve, it restores automatically based repayments and according to a predetermined schedule in the contract.
Why a revolving debt?
The revolving credit is an offer that is suitable for small daily expenses and to meet the unexpected.
However, you should know that this type of consumer credit has the highest rates in the credit market for consumption. It is therefore recommended that the contract for short periods. In this context, it should be noted that the duration of the contract is 3 months to 1 year, renewable, generally. It is possible for the borrower to seek reduction of his credit limit, the suspension of the contract (the right to use) or the termination of his contract.
The advantages of revolving debt
Flexibility is a key benefit of the borrower. The latter, indeed, may request that the credit is renewed, the amount made available is reduced or increased, it is not necessary to use the full amount, etc… It is possible, through this, to meet current expenditures. In addition, the monthly payments are not fixed: they vary depending on the cash available to the borrower.
In some cases, this pool of money can be used to offset the overdraft from the bank account of the borrower. A transfer occurs automatically to fill the open main account.
In general, it is also possible to make transfers:
– Revolving debt to his checking account
– From his checking account to revolving credit, to reduce outstanding loans and lower monthly repayments.