Having an inexhaustible supply of money and being able to withdraw several times is the image associated with revolving credit. Indeed, it is a very attractive loan offer that frees the consumer of heavy administrative procedures from banks. In addition, this offer is available online today and the release of funds is fast. Whatever the case may be, revolving credit also presents constraints that should not be neglected. It is important to know how it works, its advantages, its disadvantages but also to make good use of it …
A continuous supply of credit
From the legislative point of view, revolving credit must follow a common mode of operation for all types of consumer credit. But nevertheless, it remains in its true nature a credit in its own right whose modalities must be well controlled. Generally, revolving credit is reloaded as repayments are made.
In a revolving loan, the amount borrowed can be disbursed without a justified reason. Thus, this loan makes many check transfers and multiple withdrawals by credit card within the limit of a maximum amount to borrow. Thus, for a loan of 3000 €, the borrower can make transfers on his own account or finance his purchases by credit card. Despite this ease of use, it is recommended to study this product particularly using the online revolving credit comparator. It also helps to find the best revolving credit at the lowest rate.
The advantages and disadvantages of revolving credit
Useful when time is short, the revolving credit makes it possible to refrain from tedious steps to obtain a loan. It does not require a file study and can be accessed online. Indeed, it is possible to apply for revolving credit online immediately. This approach does not require a processing fee and this therefore reduces the monthly payments. From the point of view of repayments, the borrower can discharge the monthly payments, especially with a view to closing the credit, simply by making an early repayment of his revolving credit. Note that this operation does not generate additional costs. In addition, the revolving credit does not require proof of use and allows a permanent availability of cash. In any case, revolving credit is very expensive especially if the borrowing rate is revised upwards each year. Moreover, if the consumer abuses the revolving credit, he can be easily victim of over-indebtedness.
Use of the revolving credit reserve
The revolving credit reserve should be used wisely, otherwise it could be a source of over-indebtedness. Indeed, it is not enough just to know how to unlock its revolving credit, but it is also important to manage this fund well. It is advisable to avoid extending this credit and use it only on an ad hoc basis. In addition, if your financial situation is weak, it is better to protect yourself with a revolving credit insurance.