Personal payday loan and revolving credit differences is a frequently asked question that I will try to answer here. They both have advantages and disadvantages and depending on what you are planning with the credit, only one is a good choice. Not only the interest is important, but also the conditions and the duration of the various loans can be crucial.
The amount of the loan also plays a role, you often see that a slightly higher loan amount can give a considerably lower interest rate. Especially with a revolving credit this can have a major impact on your monthly expenses.
Personal payday loan and revolving credit the differences
Let’s just get straight to the point by summing up the most substantial differences with regard to these two types of loan. For the sake of clarity, I assume the loan of 20,000 euros. What should you pay attention to and how do you choose one of them so that you know exactly where you stand with interest, duration and conditions.
The revolving credit in the news
There has been some stirring over the revolving credit lately because an interest rate has been implemented for a number of people. No repayments were made with the monthly installments, but only the interest was paid. A vicious circle that you will no longer be able to reach, because you will not pay anything off, the credit will remain open for the rest of your life. A good lender clearly indicates when interest rates can rise and up to how much. Then you will hardly be faced with unpleasant surprises.
These are the differences
The differences are in different parts of the two credits. This is the interest, the duration and the conditions. These are listed below.
Revolving credit: Variable. You only pay interest on withdrawn amounts.
Personal payday loan: Fixed during the entire term. From day 1 you pay the interest on the total amount.
Revolving credit: Can be extended again after the expiry of the term and you can withdraw repaid installments.
Personal payday loan: Fixed term, this cannot be extended. You can no longer include repaid installments.
An interim risk analysis can be made for the revolving credit. This means that if your personal circumstances change, the interest rate may fall or rise. With a Personal payday loan this analysis is made at the beginning and no matter what happens, the interest never changes. You can apply for both loans from € 2,500.
Depending on your goal
So above you can see the differences in both loan forms. It should be noted that if you are going to do a large expense in a go for a car, a camper or a new kitchen, for example, you better opt for a Personal payday loan. Often the interest is also slightly lower. If you just want some money in hand for emergencies, then you opt for revolving credit.