With revolving credit there are no predefined payments, as opposed to installment credit. Credit cards are the most common example of revolving credits for consumers. For the corporate world revolving credits are often used for day-to-day liquidity.
- Revolving credits require case studies on the solvability and liquidity of the borrower
- There is a pre-approved limit to how much funds can be withdrawn
- Credit can be repaid at any time, which naturally also increases the capacity to withdraw again from the account
- Credit can be used many times
- Payments are based on actual amounts withdrawn, with added interest
- There is usually a minimum payment requirement
- The credit can be fully paid off at once if wanted