Revolving debt allows customers to have a certain amount of money used at any time and reconstituted as and their repayments. This type of loan – also called “consumer debt” This is the most flexible formula of the credit market. Be careful, however, interest rates, often high and vary according to the amount of the reserve and the amount used.

 

Principle Revoling Debt

 

The credit institution puts at your disposal a pool of money which you can use in whole or in part, as you see fit, within this limit. This product comes with small monthly payments that allow automated replenishment of the reserve, which is always reusable.

 

For loyalty cards offering consumer credit, it will be automatically activated, it will apply for benefit. Thus, consumers will no longer enter into a new credit despite them.

 

Good to know

 

Even if today offers are very different, the APR (Annual Percentage Rate) is the rate measures the true cost of a loan. In addition to the nominal interest rate, it includes the fees, insurance costs and warranty. It must appear on your loan offer.

 

Be vigilant

Once the revolving debt started, we should remain vigilant. Unlike traditional amortizing loans, the rate of subscription is not guaranteed. Indeed, nothing in the Revolving debt agreement is guaranteed just the advertised rate on the day of the subscription will be applied on the day of the actual use of money, especially if it takes place a few months later.

 

How to stop?

 

At this stage, it is still possible to arrange when you feel come skidding. The general conditions for revolving debt generally provide the ability to terminate the contract. The remaining balance is then converted to fixed-rate loan; the money supply is then no longer available.

 

Protection

 

Revolving debt, special rules, to inform and protect the consumer, apply to the prior offer of credit:

  • That contains the characteristics of debt, including the maximum amount of debt, the total cost, the conditions and cost of insurance, if any,
  • A reflection period of at least 15 days to allow the borrower to study the terms of the contract,
  • And a withdrawal period of 14 days after the initial offer loan signed, during which the borrower can still retract.