When a revolving credit is useful
If you want to borrow money more often, for example for larger expenses such as a washing machine or a car, you can consider taking out a revolving credit. It is one of the most popular loan forms. This is mainly due to the flexible nature of the loan. You decide when and what amounts you withdraw. Unlike the personal loan, you do not get the entire amount of the loan deposited in one go.
You can withdraw the money in parts up to the limit. Very handy, because one moment you need more money than the next. In general, the amount that you can borrow will be between 2500 and 75,000 euros. When you need one-off money, you better opt for a personal loan.
How do you take out a revolving credit?
With the lender, often a bank, you agree on the maximum amount you can borrow. That is the credit limit. The amount depends on the income, any other outstanding loans and the personal situation. When you withdraw money from the account, you immediately start paying interest. Interest is only paid on the amount withdrawn. You also pay part of the loan repayment in monthly installments.
Because the interest that you have to pay on the loan amount is variable, it can change. If the interest rate changes during the term of the credit, the monthly amount that you must pay remains the same, but the term does change. A lower interest rate means that you pay less interest each month, so that the repayment part becomes higher. The amount you pay per month remains the same. The debt will then be repaid earlier. It is different when interest rates rise. You pay less each month while paying more interest. The consequence of this is that you will take longer to get rid of your debt. It is therefore not always clear when the entire loan will be repaid or what the interest charge will be during the credit period. The interest rates that the lenders charge may vary considerably, so pay attention to this when choosing a provider. That can save a lot of money.
Amount of the loan amount
The amount for which you can take out the loan and the amount depends on your own personal situation. The lender will first of all pay attention to the level of income, but also looks at the type of employment you have, your age, the house in which you live, the housing costs thereof and possible other loans. The lender will generally want to get information about your financial situation before the loan can be taken out. For this, a test can be done at the Credit Registration Office (BKR) in Tiel.
Pay off without penalty
In addition to the repayment that you owe, you can also repay additional amounts at any time with a revolving credit. If it turns out afterwards that you still need the amount, you can also withdraw it from the account, as long as the credit limit is not exceeded.