Revolving credit
How it works: After signing a loan contract. The bank will transfer the whole or a part of borrowed money to your bank account. Every month you have to pay interest and repayment. In a standard contract this is 2% of the loaned amount. For example: For a loan of 10.000, the monthly payment is 200. There is a possibility to make other monthly payback agreements. Like 1% or 1,5% a month. Then the monthly payments will be 100 or 150.This type of loan is very flexible because you have the right to withdraw the repaid amounts of money without costs. It is also possible to pay back the whole loan, or a part of it. without any penalty.
Duration and interest: No one can tell the exact duration of this type of loan because it has two unknown factors. 1). The interest. It can fluctuate. 2. You have the right to withdraw repaid amounts, whit's effects the duration. We are able to calculate the possible duration when we assuming the interest will be the same, the monthly payments are never to late and the client never withdraw the repaid money. We call this "theoretische looptijd" theoretical duration.