REVOLVING CREDIT Meaning and
Definition
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Revolving credit is a financial arrangement that offers individuals or businesses a line of credit from which they can borrow funds repeatedly, up to a certain limit. It is a type of credit that allows borrowers to access funds as needed, rather than taking out a fixed loan amount at once. Revolving credit is commonly associated with credit cards and lines of credit.
In revolving credit, the borrower is approved for a maximum credit limit, and they can borrow funds up to that limit at any time. As they repay the borrowed amount, the credit becomes available for use again. The borrower can choose to repay the borrowed funds in full or only make minimum payments, but interest is charged on the outstanding balance.
One main advantage of revolving credit is its flexibility, as the borrower has ongoing access to funds whenever needed without having to reapply for credit. It allows individuals or businesses to manage their immediate needs and cash flow fluctuations. Additionally, borrowers can control the amount they borrow and the pace at which they repay the debt, as long as they make the minimum required payments.
Revolving credit is also accompanied by an interest rate, which varies depending on factors such as credit history, current market rates, and the lender's policies. It is important for borrowers to manage their revolving credit responsibly to avoid falling into excessive debt or damaging their credit score.
Common Misspellings for REVOLVING CREDIT
- eevolving credit
- devolving credit
- fevolving credit
- tevolving credit
- 5evolving credit
- 4evolving credit
- rwvolving credit
- rsvolving credit
- rdvolving credit
- rrvolving credit
- r4volving credit
- r3volving credit
- recolving credit
- rebolving credit
- regolving credit
- refolving credit
- revilving credit
- revklving credit
- revllving credit
Etymology of REVOLVING CREDIT
The word "revolving credit" has its origins in the Latin verb "revolvere", which means "to turn back" or "to roll back". This verb is formed by combining the prefix "re-" (meaning "back" or "again") and the verb "volvere" (meaning "to turn" or "to roll"). In the context of credit, the term "revolving" refers to the continuous cycle of borrowing, repaying, and borrowing again. This cycle is similar to a wheel or a revolving door, where one action leads back to the starting point, only to be repeated. The term "credit" itself comes from the Latin word "credere", meaning "to trust" or "to believe". Therefore, "revolving credit" refers to a type of credit arrangement that allows borrowers to continuously access funds as long as they make timely payments.
Similar spelling words for REVOLVING CREDIT
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