B
orrowers look at a particular type of loans. For instance, they want to repay them in number of easy installments over the fixed loan period or pay them in full at the end of the loan duration.
They need friendly terms and conditions to agree upon with the lender before availing the loan. Often, the terms are not as you would expect.
On the other hand, revolving loan allows us to borrow the money as and when needed for our continuous working and operational needs. It involves us to agree upon the credit limit up to which we withdraw the money.
Once we have paid the credit limit or the owed amount, we can again withdraw and repay it until the predetermined loan period expires. This type of loan is essential if our business is based on dynamic financial needs and we need to cover the unexpected funds requirements.
An overdraft facility is an example of this. Under the overdraft feature, we can borrow more money than what we have in our accounts - provided we do not exceed the negative balance limit.
Revolving loans are usually short termed and are usually available at a higher rate than the term loan. On the brighter side, it doesn’t require you to repay it in the fixed time or installments as in the case of the term loan but when you have exhausted the credit limit and wish to redraw the money.
Our advertising partners offer repayment duration of 12 to 120 months. I.e. 8000 in 48 monthly payments to the 4.50% rate. amount tot. due: 8,756.64; APR max: 10:50%
[Photo: help.consumeraction.org.au]
