Difference payday loan and revolving credit


If you want to borrow money, the two most popular forms of loan are the revolving credit and the payday loan. Which you choose depends, among other things, on your loan goal. But in short, with a payday loan, everything is fixed in advance and a revolving credit is much more flexible.

Difference payday loan and revolving credit

Difference payday loan and revolving credit

The difference between revolving credit and payday loan can best be made clear on the basis of the table below:

Characteristics payday loan Revolving credit
Interest Fixed Variable
Loan amount directly on account Yes No
Interest deductible Sometimes* Never
Pay off extra without penalty Not always** Always
Re-record repaid amounts No Yes

* Interest is deductible if the loan is used to improve the owner-occupied home
** With many lenders you may not repay additional fine without penalty for a payday loan

payday loan meaning

payday loan meaning

A payday loan is a form of loan in which everything is fixed in advance. You borrow a fixed amount, at a fixed interest rate and a fixed term. If you are going to take out a payday loan, you will know exactly when you have lost how much and what the loan will ultimately cost you.

Revolving credit meaning

Revolving credit meaning

In contrast to the payday loan, a revolving credit is much more flexible. With a revolving credit, you agree a credit limit with the lender. You can then withdraw and repay unlimited amounts up to this agreed limit. The interest with a revolving credit is variable, so you do not know in advance what the exact monthly costs are. In addition, you only pay interest on the amount actually withdrawn.

Choose revolving credit or payday loan?

Choose revolving credit or payday loan?

The question as to which loan type you should choose, a revolving credit or payday loan, depends on your loan objective as indicated. But just as important is how you handle the loan. Because with a revolving credit you can withdraw and repay unlimited money, it is important that you deal with this in a disciplined manner. The temptation is great for many people to borrow more and spend on other things than was actually intended. As a result, a revolving credit often runs longer than necessary and the loan is ultimately a lot more expensive.

Tip! Wondering how much you can borrow? With Geld.nl’s calculation tools you can easily calculate your loan.

Save on your payday loan or revolving credit

Save on your payday loan or revolving credit

Whether you opt for a revolving credit or payday loan, it is important that you do not unnecessarily pay too much. To prevent this, we recommend that you always make an objective comparison. That is now very easy online. We list the largest range of loans for you, arranged by price and conditions. This way you can find the loan with the lowest interest and best conditions at a glance and you can be sure that you are not paying too much.

Do not pay too much for your payday loan or revolving credit! Compare the largest loan offer and find the loan with the lowest interest rates and best conditions. You can then request the loan of your choice online within minutes. This way you save up to 700 USD per year on your loan! 

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