While the Revolving Loan and the payday loan are both consumer loans, they have some nuances. Before making a choice, it is best to try to understand how each type of credit works and identify its needs. The loan applicant will be able to simulate credit once their needs have been identified.
Identify your needs before making your choice
The first thing to do before even making a comparison of credit proposals on the market is to identify its needs.
This step allows the borrower to determine the reasons for applying for credit. It will be according to the intended use that he can determine the type of credit that suits him.
If the borrower intends to use his credit to undertake a well-defined project such as an apartment renovation, a vehicle purchase or a vacation, conventional payday loans such as work loans , will better suit his project. On the other hand, if he does not really have an idea in his mind and would like to subscribe to a credit for various expenses, he can move on to Revolving Loans.
Revolving Loan: Flexible Credit
The Revolving Loan, also known as a credit reserve, is a loan that allows an individual to obtain financing without proof of use. The credit can therefore be used to finance various personal expenses.
It is an available credit that costs nothing until it has been consumed. On the other hand, it generates interest as soon as the borrower uses all or part of the credit sum. He will have to repay the credit in monthly installments whose amount is defined at the signing of the contract.
This type of credit can be used for everyday purchases or occasional expenses such as when children go back to school or on family vacations.
This type of credit can not, however, be used to pay monthly rents. The only disadvantage of Revolving Loan is that the borrower does not know in advance the end date of repayment since the credit is reconstituted as and when.