Credit loans function similarly to credit cards, but credit loans generally require real estate mortgage and are interest-bearing.

Credit is a certain limit given to the lender. Within a certain period, this loan limit can be used at any time, which is similar to the credit card limit. However, credit loans generally require real estate mortgage and are interest-bearing, while credit cards are free of charge. There is no interest during the interest period. Applying for a credit card can be regarded as a credit granting process, but the limit is low. The bank gets commissions from the merchants who consume it as profits, but the credit-granting bank's profits only come from loans.

Extended information

Credit loans are divided into revolving credit and non-revolving credit. Revolving credit means that during the credit period, customers can repeatedly obtain loans with a total balance not exceeding the credit amount. , Non-revolving credit means that during the credit period, the cumulative loan amount obtained by the customer does not exceed the credit amount.

The characteristic of revolving credit is that after the customer obtains a certain loan limit from the bank, he or she can withdraw funds in installments and use them repeatedly within the period. When withdrawing a single amount of money that does not exceed the available limit, the customer only needs to fill in the withdrawal form. The payment application form does not need to be reviewed and approved again, and cash can usually be withdrawn within 1 hour. It is more suitable for individuals’ capital demand characteristics of “small amount, urgent requirements, fast turnover and retailization”.

Judging from the current market, many banks have launched "revolving loan" business. Although the names are different, most of them have the characteristics mentioned above.

Among the more representative ones are the "Happiness Loan" upgrade plan of the Industrial and Commercial Bank of China, the personal credit revolving loan of the Bank of China, the personal consumption line loan of the China Construction Bank and the personal credit line revolving loan of the Minsheng Bank, etc. , and other types of housing loans, such as Shenzhen Development Bank’s “revolving loan”, also indirectly provide borrowers with space for consumption in other areas.

Baidu Encyclopedia - Credit Loan

Baidu Encyclopedia - Revolving Credit