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What is Revolving Credit & Closed End Credit?

  1. Closed End Credit is a secured one time borrowing and paying back in installments till the balance is cleared. Revolving Credit is risk based continuous process of utilizing within the credit limit and pays back the requested amount.

  2. Closed End Credit is a process of repayment which includes principal and interest paid on principal over a period of time. Revolving credit is a basic process of repayment of amount in equal installment over a period of time.

  3. Closed End Credit is risk based continuous process of utilizing within the credit limit and pays back the requested amount. Revolving Credit is a secured one time borrowing and paying back in installments till the balance is cleared.

  4. Closed End Credit will give a line of credit against which customer can borrow and make payments multiple times. Revolving credit can be treated as a separate loan and pay back money in easy and flexible installments.
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A Correct answer
Explanation

Closed-end credit represents one-time loans (like auto loans or mortgages) paid back in fixed installments over a set period. Revolving credit (like credit cards) offers a continuous line of credit that can be repeatedly used and repaid up to a limit. Other options switch these definitions or mischaracterize the terms.

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