A revolving credit is a consumer credit
. With a revolving credit you can flexibly withdraw and repay money. You may take more in one month than in another. And that works out well. Because you only pay interest on the amount that you have withdrawn from your revolving credit. Another additional advantage of a revolving credit is that you are not bound by a fixed term. You can withdraw a sum of money at any time for an indefinite period of time. Of course, the credit has to be paid off at some point. Many lenders make it a condition that the revolving credit has ended before retirement age.
If you want more financial freedom for an indefinite period and you do not find it a problem that this is accompanied by a variable interest, then a revolving credit is a good solution for your situation. A revolving credit has no end time, provided you reach the age limit of 60.
amount you can request in revolving credit
depends on your personal circumstances. Think of your income and other fixed costs. The interest charged on a revolving credit is determined on the basis of the outstanding amount. The interest you pay on a revolving credit is variable. This means that the interest can be higher in one period than the other.
The interest on a revolving credit depends on several factors. First of all, the interest is different for every lender. In addition, the risk profile of the applicant is also taken into account: the less risk you bear, the less the risk premium in the interest rate is. A family in which both partners have a permanent contract of employment with an owner-occupied home carries less risk than a student who still lives in rooms. This method of determining interest is called Risked Based Pricing.
With a revolving credit you pay off an amount every month. This amount consists of part repayment and part of (variable) interest. An advantage of this is that you pay interest on the amount you have withdrawn.