Revolving Credit
Revolving credit ( revolving credit facility ; English to revolve , "folding" ) is banking the term for loans that the borrowers to the maximum height of a line of credit within the credit period can be repeated in varying height can be claimed, even if in the meantime all or partial repayments have been made.
General
The classic loan is characterized by the fact that it is finally repaid by the borrower through scheduled repayment ( installment loan , annuity loan or bullet loan ) according to a specific repayment schedule . However, there are also types of credit for which repayment in the meantime does not lead to permanent repayment. These include as part of lending money the bank overdraft , overdraft facilities and credit lines. The latter includes the guarantee credit , a loan in which the bank makes its name available through a surety / guarantee . The revolving loan is similar to the German current account and overdraft facility with the exception that no credit balance is permitted with the revolving loan . In international credit transactions , the roll-over credit and the stand-by credit are part of the revolving credit.
Legal issues
Revolving loans are banking transactions in the form of money lending ( Section 1 (1) No. 2 KWG ) or loan lending (Section 1 (1) No. 8 KWG). In its banking statistics, the Deutsche Bundesbank makes revolving loans a prerequisite that they can be used repeatedly without the lender's prior knowledge - even in the case of loan parts that have been temporarily repaid - without regular repayment obligations. Since June 2010, they have been queried as part of the MFI interest rate statistics together with overdrafts . The granting of a revolving loan can also result from the type of loan, but for the sake of clarity, the loan agreements are usually designed in such a way that interim credits should not lead to repayment, but only serve as a temporary investment . Then the loan is revived at any time up to the line of credit. Temporary repayments are not considered final, but can be used again until the line is due . A commitment interest rate is usually charged by banks on such loan commitments ; Loans that have been drawn down usually have a variable interest rate that is often linked to reference rates such as LIBOR or EURIBOR . They are used to finance the borrower's current assets , their term is between 1 and 5 years.
The borrower's fulfillment of the disbursement requirements of an irrevocable loan approval triggers a disbursement claim by the borrower, so that the bank is obliged to pay out. Corresponding to the lender's payment obligation, the borrower has a claim to payment that can be assigned , pledged or pledged independently ( Section 398 ff. BGB). The seizure covers the payment claim as such and not just the claim to the temporary use of the capital. The borrower has the right to disbursement as long as he does not use the approved loan in whole or in part.
Credit cards
In the case of credit cards , Bank of America and Chase Manhattan Bank developed the revolving credit in 1958. Loans are granted as revolving credit for all customer credit cards , in which they agree a payment term with the cardholder. Within the specified limits, the credit card user receives a revolving credit up to the respective collection date through the continuously debited credit card usage, which is not charged to the user immediately, but is only debited collectively at the end of the month or the end of the quarter. Nevertheless, he must have a credit balance or an overdraft facility in his bank account on the settlement dates so that the card issuer can collect his claims by direct debit .
Individual evidence
- ^ Deutsche Bundesbank, Selected key words in statistics, revolving loans, accessed on November 9, 2015
- ↑ BGH WM 1957, 635, 637
- ^ Peter W. Heermann, Handbook of Law of Obligations , Money and Money Transactions, 2003, p. 423
- ↑ Wolfgang Breuer / Thilo Schweizer / Claudia Breuer (eds.), Gabler Lexikon Corporate Finance , 2003, p. 307
- ↑ BGHZ 147, 193, 196
- ↑ Jeremy Rifkin, Access - The Disappearance of Property , 2007, p. 55