What is a revolving loan – advantages and disadvantages of a credit card

Are you in need? Do you need a large amount of cash? There are many different forms of financing; loans, payday loans, but our main goal is to make it beneficial for us. We may consider taking a cash loan, but why should we do it, if there is a better and more flexible option? It is a revolving loan. What is characterized by? Who can use it? Let’s see!

What is a revolving loan?

What is a revolving loan?

A revolving loan is a loan in an account. It is related to the current account. This form of financing is a very attractive solution for people who urgently need a large injection of cash. This is a permanently available credit line on your personal account, which can be used for any purpose.

We will try to explain it as simply as possible. Let’s imagine that we have 5,000 zlotys on our personal account and we use a revolving loan of 3,000 zlotys, so in total we have 8,000 zlotys on our account. When using a revolving loan, the funds obtained from it belong to us and we can use them freely, e.g. by paying online for purchases or making transfers.

How to repay a revolving loan?

Both repayment and renewal of a revolving loan usually takes place automatically. We receive the next “pool” of revolving credit when we repay the previous “pool”. When funds appear on our personal account, the bank takes the amount of debt and in this way our loan is restarted / revived.

A standard contract of this type of financing usually lasts for 12 months.

Revolving loan interest rate

Revolving loan interest rate

The revolving loan interest rate depends primarily on the bank. Usually, it is around 10% per annum, i.e. on average 1% per month, which is why many clients “get” this form of financing, hoping that they can cope with repayment due to such low interest rate.

Who can get a revolving loan?

Each bank has different rules for granting a revolving loan, however, the general rules for granting it are similar everywhere. The following may apply for this form of financing:

  1. individual clients who have Polish citizenship and live permanently in Poland,
  2. individual clients who are citizens of foreign countries, but are employed by an entity that has its headquarters in the country or persons receiving e.g. a pension or a scholarship.

In addition, such persons must:

  • have an account at a given bank for a specified period of time (usually 3 months if they were made systematically, monthly receipts or 6 months, if these inflows were made less often,
  • have creditworthiness,
  • may not have an unacceptable debit balance within the time specified by the bank before submitting the loan application (usually 3 months).

A revolving loan for companies

A revolving loan for companies

Entrepreneurs who run their own business, when they need an extra cash injection, often have several forms of financing to choose from, but they don’t always know which one to decide on. As it turns out – the best and most advantageous option is a revolving loan for companies.

Why is a revolving loan a good option for companies?

When we decide on a revolving loan, we get something like an overdraft or overdraft. Our personal account receives funds that we can freely use, including perform financial operations, withdraw from an ATM. The amount we can get as a revolving loan usually depends on one key factor – the income of the person applying for the loan. Typically, a revolving loan is a multiple of your monthly income.

What can we use the revolving loan for companies for?

It doesn’t really matter. His destiny depends on our needs. Everyone who runs their own business knows that there are often situations that we urgently have to pay something (e.g. PIT or VAT to the Tax Office), and our contractor is late with payment. So a revolving loan gives us more cash, as well as freedom, because we don’t have to worry that we won’t be able to pay anything.

What is overdraft?

What is overdraft?

Overdraft is a negative account balance. It arises when the client pays more money out of him than is on it.

How does debit work?

We receive an additional cash limit on our bank account, which remains at our disposal when our own cash runs out. With the next cash flow (eg income from work), the amount we are indebted to, ie “in minus”, will even out.


It should be remembered that when deciding on any form of financing – whether it is a revolving loan or a credit card – we cannot forget about reason and responsibility. We need to think carefully about our needs and capabilities. Credit is often a good and useful tool that helps us in urgent situations, and also allows you to efficiently manage your home budget.

Before we make a final decision about a loan, it is good to check the opinions of other customers and be guided by your own judgment.