Payday loan vs revolving credit
We notice that there are many people who do not know the difference between the payday loan and the revolving credit. And that is essential to know if you decide to borrow money. There is a considerable difference between these two loan forms.
Which loan form
If you want to borrow, you want to keep control of your financial situation. By knowing well in advance which loan you take out and what the conditions of such a loan are, you are already well on your way to keeping control.
If you take out a payday loan, you opt for a certain amount of security in the area of borrowing. The interest and the term are fixed and you also know exactly what you have to pay per month. This is therefore the security of a payday loan. The interest rate and the term can vary with the revolving credit. If the interest rate rises, you pay off more interest and therefore pay less on your loan. It can therefore happen that you are only paying off interest and the loan will hardly be repaid. The term is therefore not fixed by the variable interest rate but also because you can always withdraw money.
Pay off without penalty
The reason that many people take out a revolving credit is that you always have money in hand, you borrow no more than you need and you only start paying off as soon as you use the credit. Another advantage of the revolving credit is that you can always pay off without penalty. So if you ever have extra money that you could miss and you want to pay extra, then this is no problem.
So close the loan form that fits with what you need the money for. If you need a one-off amount for the purchase of a car, the payday loan is most suitable for that. If you want to borrow money for a renovation of which you do not know exactly how much this will ultimately cost, then the revolving credit is a better solution. You can always withdraw extra money if you are faced with unforeseen expenses.