Revolving credit and non-revolving credit are two types of credit arrangements that have some key differences.
Revolving credit is a line of credit that you can access over and over again, with a total credit limit, such as credit cards.
Non-revolving credit gives you a specific amount of money that you pay down over time, such as loans and mortgages.
One of the main differences between the two is how often you can access the money from your credit account.
With revolving credit, you can access the credit limit repeatedly. In non-revolving credit, you get a one-time amount.
While revolving credit has a minimum to pay month-on-month, non-revolving credit has a steady repayment schedule.
Non-revolving credit often has a lower interest rate than revolving credit, but it does not have the same flexibility.
Revolving credit remains open until the account is closed. Non-revolving credit is closed when you pay credit back.
Understanding the difference between revolving and non-revolving credit is crucial to know which to use when in need.