A borrower can absolutely cancel his revolving credit… as long as he meets a few conditions. The law foresees different cases, especially in case of financial problems, for which the early payment of a reconstitutable credit is simplified. Discover in this mini guide tips to help you stop a revolving credit.
When does one stop repaying a revolving credit?
If a borrower signs up for a conventional consumer credit, the completion date is indicated in the loan conditions. This tells him when he will have finished paying the amount borrowed from the beginning. In the context of revolving credit, the situation is completely different. There is no agreement that the contract will be terminated if the last payment of the sum has been made. In a revolving credit, all the borrower’s payments only make it possible to return the amount available for new financing. The credit exists constantly and therefore there is no possibility of stopping it by repaying it.
The specific request of the borrower is the only way to stop a revolving credit. When he defaults on his payments, a request from the lender.
Request to cancel the revolving credit
During the life of the loan, the borrower is free to ask for it to be suspended. He does not have to invoke personal reason. Of course, he remains committed to the amounts still used, and is then liable to pay them in full. If the sums are too large to be repaid at the same time, the borrower has the right to request a staggering of repayments to avoid losing control of their financial affairs.
Please note: the lending institution is not obliged to make an instalment payment on the debt. In fact, when the lender offers this facility, there is often a cost, which must be considered.
Another circumstance allows the lender to suspend its revolving credit. We are talking about the right of withdrawal.
Terminating a revolving credit in the event of financial problems
There is a possibility to stop a revolving credit in case of financial difficulties. The repayment of a permanent credit can be spread over many years. During this time, the borrower’s financial condition will improve and repayment problems are likely to arise. It is therefore possible that one or more non-repayments of the fees provided for in the contract may occur. Under these conditions, the lending institution therefore has the possibility of terminating the revolving credit. It is supposed to start with a formal notice to make a payment. In the absence of regularisation, the lessor is free to terminate the credit agreement. In accordance with the contract, he has the full right to apply compensation for delays, to demand instant repayment of the amounts borrowed and to demand repayment of the interest due but not yet paid.