Revolving Loan Facility

DEFINITION of 'Revolving Loan Facility'

A financial institution that allows the borrower to obtain a business or personal loan where the borrower has the flexibility to decide how often they want to withdraw from the loan and at what time intervals. A revolving loan facility allows a company to drawdown, repay and re-draw loans advanced to it. This type of loan is considered a flexible financing tool due to its repayment and re-borrowing flexibility.

BREAKING DOWN 'Revolving Loan Facility'

A loan from this facility is provided over a specific period of time, usually one, three or six months. It is not considered a term loan because, during this allotted period of time, the facility allows the borrower to repay or take the loan out again. It is also different from a fixed monthly payment loan because a revolving loan lets borrowers use as much of the credit as is available and only pay interest on what they have used.

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RELATED FAQS
  1. Can personal loans be transferred to another person?

    Personal loans cannot be transferred to another person, because these loans are determined based on your unique credit score ... Read Full Answer >>
  2. Are personal loans considered income?

    Personal loans are not considered income for the borrower unless the loan is forgiven. In other words, you cannot be taxed ... Read Full Answer >>
  3. Can personal loans be included in bankruptcy?

    Personal loans from friends, family and employers fall under common categories of debt that can be discharged in the case ... Read Full Answer >>
  4. Are personal loans tax deductible?

    Interest paid on personal loans is not tax deductible. If you take out a loan to buy a car for personal use or to cover other ... Read Full Answer >>
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