Termination of a revolving credit
As we all know, subscribing to a contract, whatever it is, is generally quite simple. To part with it is much more complicated. Between the deadlines to be respected, the specific conditions, the tacit renewals, and whatnot, it is sometimes very complicated to terminate a contract. Fortunately, the laws have changed a bit in our good old United States. So now, canceling a revolving credit has become very simple.
Indeed, since August 1, 2005 and the implementation of the Châtel law, it is possible to terminate a revolving loan at any time. In fact, it is of course necessary to have repaid all the sums borrowed, as well as any penalties provided for in the contract. Here are the two most common cases.
Termination on the anniversary date.
Since the Lagarde laws of 2012, revolving credit has changed. Institutions and subscribers now enter into a one-year contract, renewable by tacit agreement on each anniversary date. However, 3 months before the said anniversary date, the funding body with which you have subscribed your contract must send you a letter in which it must stipulate the conditions. of the contract for the coming year. This information must contain three elements, including the terms of termination.
In fact, you have up to 20 days before the anniversary date to send a letter to the establishment in question. In this letter, you simply state that you wish to see your revolving credit stop, and you accompany your letter with a check for the balance, if applicable.
You can do this because you no longer want to or because you do not agree to the new terms.
Termination due to non-use of revolving credit.
If you do not use your reserve of money, know that it is suspended after one year of inactivity. However, it can be reactivated in the following year. In fact, it takes two full years, without any action on the revolving credit, for it to be de facto terminated. If, despite this time without use, you still have sums to pay, you will have to pay the balance at the same time.
There is a final case of termination. This is the revolving credit to which you have subscribed, but which you ultimately do not want to activate. As long as you are still within 14 days of subscription, you have every right to request termination of the contract. Formerly limited to seven days, this termination period has been extended by Law No. 2010-737 of July 1, 2010. Do not hesitate to use it when you withdraw.
In short, and to sum it up, it is possible to terminate your revolving credit whenever you want, as long as the reserve is complete and you have no money left to repay. However, an unused revolving credit does not generate any costs and always leaves the possibility of an appreciable payday in case of hard blow.