What is the difference between revolving credit and personal loan? We will see that if these two credits do not imply justification, the game of similarities stops there. Understand everything so as not to be mistaken when applying for credit.
Revolving credit and personal loan: what differences?
Revolving credit and personal loan have one thing in common, that of not obliging the borrower to justify his project. The resemblance stops there or almost. Our summary table of the differences between the two types of consumer credit helps to clarify the gray areas.
|Comparison criteria||Personal loan||Revolving credit|
|Proof of project to provide?||NO||NO|
|Rate||Fixed APR||Revisable APR|
|Amount||$ 1,000 to $ 75,000||500 $ to 6000 $ (rarely more)|
|duration||12 to 84 months||36 months maximum up to 3000 USD and 60 months beyond|
|Money reserve available?||NO||YES|
|Can we prepay?||YES||YES|
Depreciable loan vs small loan
The personal loan is much cheaper on average than a revolving credit. This is a credit without more thoughtful proof of use, the amount of which can reach up to 75,000 USD. Revolving credit, however, grants a reserve of money available at any time. This small credit is more flexible to use. It is indeed possible to request an immediate payment in the event of a glitch or small project, within the limits of the available (see revolving credit).
Difference between revolving credit and personal loan: supporting documents
Revolving credit is easier to obtain on average than a personal loan. The reason is simple: it is more expensive. A credit institution more easily accepts a loan that can generate significant interest. It is mainly a small loan, the stakes are only rarely as high as when applying for a personal loan.
The tax assessment is not requested by organizations in the case of revolving credit, whereas it is systematically requested when requesting personal credit. This is the main difference between revolving credit and a personal loan on the issue of supporting documents. The classic documents to provide in both cases are usual: salary slips, proof of address, identity document and RIB.