How to cancel a revolving credit?

Here’s how to cancel a revolving loan.

Revolving credit: termination

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A revolving loan (formerly revolving) is a reserve of money made available to the borrower and enabling him to settle consumer purchases. These loans are often based on high rates, sometimes even close to the legal limit of 20%.

There are four ways to terminate revolving credit:

  • Termination during the legal withdrawal period
  • Termination on anniversary date
  • Termination after two years of non-use
  • Termination by credit consolidation

Terminate the revolving loan: legal withdrawal period

 Terminate the revolving loan: legal withdrawal period

The law on consumer credit specifies that borrowers have 14 days to terminate an offer of revolving loan from the signing of the contract. It is enough to send a letter of termination by registered letter during this legal period. Often, the contract provides for a termination letter.

Terminate revolving credit on anniversary date

 Terminate revolving credit on anniversary date

Renewable loans are taken out for a period of one year with automatic renewal, that is to say that without termination action, the contract is renewed for a period of one year. To cancel the loan, it is sufficient to send a cancellation letter by registered letter with acknowledgment of receipt no more than 20 days before the anniversary date. The lender is required to send 3 months before the termination terms.

Terminate credit after 2 years of non-use

 Terminate credit after 2 years of non-use

If the borrower does not use the revolving loan for a year, it becomes inactive but can be activated at the request of the borrower. After two years of non-use, the contract is automatically terminated.

Good to know : payment cards associated with revolving credits offer two payment options, cash or credit (sometimes represented by the number 1 or 2 on the payment terminal). It happens that some consumers mistakenly use the “on credit” mode and therefore activate the money reserve, in this case, just contact the lender to indicate that it is an error, the latter may deactivate the use of the revolving loan.

Terminate revolving loan with credit consolidation

It is not a method of termination but a possibility of settling the revolving loan. Credit consolidation is financing which consists of combining several loans into one. The credits are therefore settled and the remaining capital to be repaid is carried over to a new credit contract which is based on a new term, a new rate and a new monthly payment.

The operation may entail costs and a possible increase in the total cost of the credit.

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