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What is a revolving loan?
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18th Nov 2009 by JonB
A revolving loan refers to a loan with no actual end, but revolves in a (usually) monthly billing process. A credit car is an example of a revolving account. You may may your credit card off completely, but the account won't close and you are free to charge it again whenever you like. Another example of a revolving account is the home equity lines of credit that are popular today. Essentially a credit card secured by equity in your home, this account revolves and can be paid off or paid down without being closed out completely. The opposite of revolving loans are installment loans which end when the product being installed (car, ATV, house etc) is paid off.
A revolving loan refers to a loan with no actual end, but revolves in a (usually) monthly billing process. A credit car is an example of a revolving account. You may may your credit card off completely, but the account won't close and you are free to charge it again whenever you like. Another example of a revolving account is the home equity lines of credit that are popular today. Essentially a credit card secured by equity in your home, this account revolves and can be paid off or paid down without being closed out completely. The opposite of revolving loans are installment loans which end when the product being installed (car, ATV, house etc) is paid off.
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17th Nov 2009 In Finance
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