Nowadays you can take out a revolving credit at a competitive interest rate of only 4.4%. Of course, this is different than the payday loan with a variable interest rate. This means that interest rates may rise or fall. Why would you actually take out a revolving credit instead of a payday loan with a fixed interest rate from 4.1%? What are your benefits with a revolving credit? Why is borrowing money with a revolving credit still popular?
Take out ongoing credit
A revolving credit is ideal if you want to borrow money in a flexible way. Unlike with a payday loan, you can always pay off without penalty. When you want, and as much as you want. In addition, there is another important difference. With a revolving credit you can also make withdrawals from your loan in the meantime. That makes a revolving credit still popular.
Take out ongoing credit? What do you have to pay attention to?
When taking out a revolving credit, there are a number of things that you should take into account.
The first may seem a bit far-fetched. But is certainly important. If you are going to take out a revolving credit it is important to check whether the provider of the loan is in possession of a license for mediation with the regulator. This is because the regulator itself also issues the licenses for brokerage of loans and naturally supervises the providers. If the credit intermediary has a license, you know at least that you are dealing with a legal lender.
Then of course comes the interest rate. That determines to a large extent what you will repay in total to your loan. The lower the interest, the cheaper your loan will ultimately turn out. Pay close attention to this.
What if the interest on your revolving credit changes?
Let us mainly start from the negative variant, the increase in your interest. If your interest rate rises, this is of course harmful to you. You must pay more in interest per month and pay less. Then the benefit of taking out a revolving credit immediately comes up again. If you notice that your provider raises interest rates, you can easily start shopping again with your revolving credit. You can compare loans and find out where you can borrow more cheaply at that time. Did you not fully trust it? Do you think that interest rates will rise even further? Then it is advisable to discuss this with your credit adviser to find out what they think about this.
You can also choose to convert your revolving credit into a payday loan. You have lost the flexibility, but you have certainty in return.