Types of Credit
Credit Types:
-Installment Credit: Credit where the borrower promises to re-pay the loan in equal amounts over a given time. This type of loan is very common and is used for things like auto loans, and home loans.
-Revolving Credit: Unlike installment credit, revolving credit does not have a fixed number of payments. The borrower receives a pre-established amount of money repeatedly as long as the borrowers account is in good standing. The borrowed money is either payed in full or partial subject to the interest/fees. This is very common for credit card loans, in which the borrower is allowed to pay the minimum payment.
-Open Credit: Credit where the borrower must repay the amount borrowed in full at the end of every month. This type of credit is often seen in business related charges, where the business is liable to pay the full amount at the end of the month.
Sources:
- http://www.nyc.gov/html/ofe/html/help/3types.shtml
- http://en.wikipedia.org/wiki/Revolving_credit
-Installment Credit: Credit where the borrower promises to re-pay the loan in equal amounts over a given time. This type of loan is very common and is used for things like auto loans, and home loans.
-Revolving Credit: Unlike installment credit, revolving credit does not have a fixed number of payments. The borrower receives a pre-established amount of money repeatedly as long as the borrowers account is in good standing. The borrowed money is either payed in full or partial subject to the interest/fees. This is very common for credit card loans, in which the borrower is allowed to pay the minimum payment.
-Open Credit: Credit where the borrower must repay the amount borrowed in full at the end of every month. This type of credit is often seen in business related charges, where the business is liable to pay the full amount at the end of the month.
Sources:
- http://www.nyc.gov/html/ofe/html/help/3types.shtml
- http://en.wikipedia.org/wiki/Revolving_credit