Revolving Closed-End Credit
Homeowners and business owners alike are enjoying our Utah EZ Pay Financing. Sometimes we are asked what is the differance between revolving and closed-end credit terms. This is a great question and deserves a solid answer.
Revolving Closed-End Credit At A Glance
In short, the closed-end account will be closed completely when the note is paid in full. The revolving stays open for more usage even though it is paid off in full.
The Revolving Closed-End Credit Differences
Let’s look at revolving credit also called open-end credit. There is big differance between the two and you as the borrower have the right to know.
A Revolving Open-End Credit Line
Revolving open-end credit is a pre approved loan between a financial institution and borrower. Tiplicaly they are associated with credit cards that have a pre approved credit limit or a credit line.
It may be used repeatedly up to a certain limit and can be paid back prior to payments coming due. Open-end credit also is referred to as a line of credit. Also a revolving line of credit stays open.
Closed-end credit is not like a revolving line of credit. This type of loan is for a specified desired length of time.
Closed-End Credit Home, Land, Auto & The Like
With a closed-end credit line, it is set to a desired time and payment structure. This is typically for loans like a home, land, auto and boat. Because this loan is paid in full, the line of credit is then closed. This happens buy the end of agreed term or by a specific date in your contract. The repayment includes all the interests and financial charges. This is what you agreed on at the time of signing of the credit agreement.
A Few Pointers & Differences
- Revolving is an open line of credit up to a specified amount
- Revolving can be used repeatedly even when paid off in full
- Closed-end is for a dedicated amount
- Closed-end closes out when the note is paid off in full
- Revolving is more like a credit card
- Closed-end is mor popular for home and auto loans
Utah EZ Pay Offers Both Revolving & Closed End Loans
Here at Utah EZ Pay we are happy to help you make your home improvement project affordable. We offer many options for both types of credit lines. Feel free to call or text us at any time at: 801-205-1955. Thank you from all of us here at Utah EZ Pay.