is a type of credit
that does not have a fixed number of payments, in contrast to installment credit
. Examples of revolving credits used by consumers include credit cards
. Corporate revolving credit facilities are typically used to provide liquidity for a company's day-to-day operations.
- The borrower may use or withdraw funds up to a pre-approved credit limit.
- The amount of available credit decreases and increases as funds are borrowed and then repaid.
- The credit may be used repeatedly.
- The borrower makes payments based only on the amount they've actually used or withdrawn, plus interest.
- The borrower may repay over time (subject to any minimum payment requirement), or in full at any time.
- In some cases, the borrower is required to pay a fee to the lender for any money that is undrawn on the revolver; this is especially true of corporate bank loan revolving credit facilities.