A revolving loan is still not popular
A revolving loan, also known as a loan account, unfortunately is not very popular. For many of us, it is a completely unknown product, and nothing surprising since even the banking institutions are quite reluctant to offer it to their clients.
Only recently have some banks started to advertise this rather specific type of traditional cash loan. Why?
Well, the answer is quite simple. For banks, it is much more advantageous to order an ordinary loan or a loan, whereas for the client himself, giving up a revolving loan for another product is a big mistake. An account credit can be almost free financial help for us, because when you pay it off within a certain time, the bank will not charge you any interest! In the case of traditional loans, this is impossible because they are predetermined and included in each installment. The interest rate of this product itself is also quite competitive in comparison to other available offers on the market. On the other hand, the great advantage of a credit line may be the fact that we repay it at any time, even one day before the end of the contract. So we do not have to worry that in a given month we do not have to pay another installment. It depends on us when and how the debt will be repaid. What’s more, the credit in the account is a cash re-use, and it’s all thanks to its renewal.
We have a revolving loan of 5,000. PLN, we almost immediately used the whole, but after two months we repaid half of the debt, or 2.5 thousand. zł. Thanks to this, the loan “renewed” to the repaid amount and again, if necessary, we can have a total of 2.5 thousand. zł. And so almost infinitively, and certainly for 12 months, because that’s how much, usually the bank grants credit. If, in accordance with the contract, we repay the debt in full together with any interest accrued, the possibility of using the limit will be extended automatically to the next period.
Unfortunately, customers rarely opt for such a product just because of ignorance. They prefer to take something traditional, certain, recommended by bank employees, often also friends. Of course, it all depends on our individual situation and certainly credit in the account will not be beneficial for everyone. However, it is worth realizing that we have a really good choice among banking products and it is not always the one that is “pressed” by the employee for us is the best for us.