One of the bank loans is the so-called revolving loan. Thanks to it, you can use the limit specified in the loan agreement many times. Each time the borrower must give a separate instruction. Money from a revolving loan is allocated to the current needs arising from running a business. This loan is characterized primarily by the fact that there are economic cycles that recur in a short time. A lot of people have no idea that there is such a bank loan at all. It is not very popular, but there are people in Poland who use it. One of the forms of such a loan is, among others, a credit card, more financial curiosities.
A revolving loan is primarily characterized by its renewable nature.
Paying off the liability gives you the option of renewing your loan limit by the amount we were able to deposit. For example, we have a limit of 1000 dollars and we will withdraw this money. The next month we will pay back the USD 100 installment. After this fact and after the payment has been credited by the bank, we will be able to withdraw the hundred dollars again and our loan will be in the amount of the initial one thousand. It should be remembered that each installment also includes interest, which increases our liability to the bank.
In addition to being revolving, a revolving loan is also characterized by the time during which the loan is valid. These are short-term loans and we usually have twelve months to pay back the loan. There are also offers when such a loan is paid back for three years, but this is rarely the case.
The interest rate on such a loan is much lower than for other bank loans.
A revolving loan is intended for those clients who still have a systematic impact of money on their account. It is also very important that their credit history is not bad and that they do not appear in the BIK, where all insolvent borrowers are registered. Many entrepreneurs use this form of credit. They can thus get extra money. In order for the bank to grant us such a loan, we must prove that our account is regularly credited with cash. We also need to present a valid business license and present our company’s balance sheet for the last period. The bank must be sure that our company is profitable. The remaining procedure for granting a revolving loan is the same as for other bank loans. As you can see, this is a very loan form that many people use, but they don’t know professionally what this type of loan is called.