Revolving credit: how it works and the legislation

You can request a revolving credit from a lender to fund your account. In fact, it is a reserve of money that you will pay back as you use it. Also called revolving credit, this loan is especially interesting for quick purchases. It is a fairly complex method of financing, with a variable interest rate. So, it is important to know it well before you start.

Revolving credit, kesako?

Revolving credit is a variant of consumer credit. Unlike other types of loan, it is not linked to the purchase of property. Concretely, the borrower requests a cash loan. This will be used as it sees fit.

Today, several banks offer revolving credit. Moreover, supermarkets agree to allow customers to pay for their purchases with revolving credit. Typically, this type of loan is tied to the customers' credit or loyalty card. Its main objective is to facilitate the use of the borrower's cash reserve.

In United States, the law requires that the loan be referred to as revolving credit in all contractual, advertising or commercial documents. This type of loan has its own functioning. The credit institution will provide you with a reserve of money that you can use at any time. From the moment you withdraw money from this reserve, a payment of the installments will be made. In addition, there is the interest rate provided for in the loan contract. Your cash reserve will be replenished during the repayment and you can borrow again.

Revolving credit, free choice for the borrower

The borrower is free to choose the type of consumer credit he wants to take out. French law provides for the possibility of subscribing to a repayable loan when the loan is greater than 1000 US dollars.

When a credit organization offers revolving credit, even in the case of an online loan, the offer must always be accompanied by an information sheet. This has all the characteristics of a revolving credit and a depreciable credit. The operation of the loan and the interest rate should be mentioned in a table. Likewise, for the monthly payments and the capital that the borrower will have to repay. In fact, the bank must offer two hypotheses to the future debtor for the repayment period.

Revolving credit

Revolving credit legislation

As part of a revolving credit, the borrower can retract within 14 days. This period starts from the moment he accepts the loan contract. In the event that the 14th day is a weekend or a public holiday, it is postponed to the next working day.

In United States, the amount and maturity of a revolving credit are well regulated. Also, no matter how much you borrow, the term should not be less than US $ 15. A minimum portion of the amount you borrow must also be returned at each maturity. Regarding the repayment period, the law is clear. If you borrow an amount less than or equal to 3,000 US dollars, you must repay it over a period of 36 months. In the event that the sum exceeds 3,000 US dollars, this period is extended to 60 months.

Sometimes the revolving credit is associated with a bank card or a loyalty card. In this case, the words "credit card" must be clearly visible on the front of the card. Furthermore, the advantages of this card cannot be taken away from you.

Finally, note that revolving credit has high interest rates. In general, they are higher than those for amortizing loans. Also, you must inform yourself well before applying for this type of credit.

Other consumer credits to enjoy

Auto Credit

You plan to replace your car or buy a new one, take out a car loan. Whether new or used, a sum of money will be made available to you to finance part or all of the purchase. You will then have to repay each month with interest. The duration of your loan depends on your repayment capacity.

Works credit

As its name suggests, work credit is used to improve or fit out your home. This type of project requires a more or less substantial budget. This is why financial organizations and banks offer individuals a loan dedicated to work. The amount ranges from $ 5,000 to $ 75,000, for a repayment term of 12 to 120 months.

Personal loan

The personal loan is designed for the realization of your personal projects related to consumption. It allows you to have an amount ranging from $ 1,500 to $ 75,000, which will be defined according to your project. The rate varies in relation to the repayment term which can be done between 12 to 120 months. Online tools allow you to calculate the total cost of your loan.

Credit buyback

The repurchase of credit is a solution offered by your bank to simplify the management of your credits, and this, by regrouping them around a single credit. It is customizable and adapts to all situations and all profiles. It allows you to better manage your budget and reduce the amount by having monthly payments up to 60% lower.

Motorcycle loan

Motorcycle credit is a consumer loan allocated to the purchase of a two-wheeled vehicle, scooters or motorcycle. It is a financing solution for the acquisition of a motorcycle, it can be new or used. Thanks to this type of loan, you can afford the motorcycle you've always dreamed of for your everyday trips.

Wedding credit

There are loan platforms that are there to support you in your life plans, including marriage. They offer this credit with the APR twice lower than that of a revolving credit. Don't deprive yourself, now is the time to treat yourself. The marriage loan is an interesting solution to finance this unique moment.

Travel credit

Travel credit is an easy way to have sufficient financing to go on vacation. It is a loan that you could request from your bank or from financial institutions to carry out your travel plans that you have always dreamed of. Of course, the money you are going to borrow is not only used for your travel expenses, but also for your equipment.

Credit without contribution

Need funding for a personal project? Be aware that there are financial institutions that grant loans without requiring personal contribution. It is a simple, fast and transparent way to grant a loan. The procedures are even simpler when the requested amount is small. Most importantly, you can prove that you are capable of honoring your commitment to your bank.

Credit without inquiry

Credit without inquiry is available to the general public in urgent need of money. It remains special with its very short processing time and unrivaled accessibility. By opting for this type of loan, you can use the allocated funds as you wish, without you having to justify. The main thing is that you can repay your loan as agreed in the contract.

Easy credit

There are many steps that demotivate borrowers to make a loan from financial institutions, if we cite only the supporting documents, the too long processing time and complex procedures. With easy credit, all these procedures no longer exist. It consists of applying for a loan online. It only takes a few clicks for the borrower to receive a response.

CAF loan

The CAF loan is advantageous in the case where it allows to obtain a loan at zero rate. You can use the funds granted for your personal projects such as work on your house, the purchase of household appliances, the purchase of a car or even to provide for childbirth costs. On the other hand, the use must be as a first necessity, but not for comfort.

A loan commits you and must be repaid. Check your repayment capacity before you commit