Credit line products

About credit lines

The credit line is a loan product that allows borrowers to access and repay loans flexibly. It is granted as a one-time or revolving limit.

Credit line types

Tuum supports two different types of credit lines:

• Line of credit - a loan product that, once paid off, means the available credit limit is no longer accessible.

• Revolving credit line - a loan product where the credit limit is restored after partial or complete repayment, allowing the borrower to reuse it again.

Credit line example

Let us consider an example to illustrate the difference between the line of credit and revolving credit. We will consider a credit line and a revolving credit line with identical, fully withdrawn credit limits of EUR 1000.

• Available limit = 0 EUR

• Principle balance = 1000 EUR

When a borrower repays 200 EUR, the line of credit and revolving credit products will behave differently.

• The line of credit reduces the principal balance by the repayment amount.

• The revolving credit reduces the principal balance by the repayment amount and adds the repayment amount to the available limit.

Line of credit	Revolving credit
Available limit = 0 EUR Principle balance = 800 EUR	Available limit = 200 EUR Principle balance = 800 EUR