The revolving card and the loan have two points in common: the granting of credit and the monthly repayment in installments. Although they have these two points in common, the rest differs, especially in terms of costs and amounts that can be claimed. Let’s see together what the revolving card and the loan are and which is the most convenient.
What is the revolving card
The revolving card is a particular credit card that allows you to have a certain amount of money available, agreed with the credit institution, for making purchases and payments. This amount is not charged in a single solution such as a credit card but is paid in installments monthly and with interest added. Every month, after repaying the installment, the available credit is restored and can be used again.
The revolving card, just like a loan, therefore allows the monthly repayment but has some disadvantages. In fact, the costs are higher than those to be incurred for a loan. Interest rates and charges are higher, even 20% higher than those to be sustained for a loan. Furthermore, if the payment of the installment is delayed, there is the risk of being reported to the credit information systems such as Crif and the Cream Bank. As a result, there will be difficulties in obtaining loans or other financial solutions.
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What is a loan
The loan is the transfer of a sum of money, by a credit institution, repaid through monthly installments and with a usually fixed interest rate. Part of this type of financing, called consumer credit:
- The personal loan
- The assignment of the fifth of the pension
- The assignment of the fifth of the salary
- The loan with delegation
- Debt consolidation
- The loan finalized
Unlike the revolving card, financing allows for much higher amounts, lower and constant interest rates and costs. In addition, the transfer of the fifth can also be requested by protesters and bad payers.
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Through a loan it is therefore possible to face small and large expenses simply by requesting the amount that is needed.
Is the loan or revolving card cheaper?
Although loan and revolving paper have some points in common, there is a substantial difference in cost between the two. In fact, the revolving card has higher interest rates and investigation costs, installment collection, commissions and insurance higher than those to be incurred for a loan. In addition, the amounts obtainable are limited and, if the revolving card exceeds six months, the costs increase further. A final aspect not to be underestimated is the risk of loss, theft or cloning of the card.
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