Tip & How-To about Finance

What is a Line of Credit? Lines of credit for individuals seeking extra finance options are called ‘Personal lines of credit’ and it’s not as complicated as it sounds. Basically – lines of credit is just one of the many ways that people are able to pay for things that they can’t necessarily afford at that time. Everybody has situations in their lives that require some extra money that they didn’t plan for. One of the options at times like these is to take out a loan but the downside of taking a regular loan is that you get the sum you need all at once and sometimes you end up spending more than you should have as your costs might build up slowly over time. A personal line of credit lets you draw on the credit as and when you need it ie when you suddenly have an unexpected cost. In general, the interest rates on lines of credit are quite low and they allow you to reach quite a high limit. The biggest advantage to a line of credit over a loan is that you make payments only on the credit that you’ve actually used. There are 2 types; Secured lines of credit: These lines of credit are backed by collateral, such as your house or business. Unsecured lines of credit; These are for people who maybe don’t have any collateral to back their credit line, as a result the interest rates tend to be much higher. Always read the small print before you sign on anything!!

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2 Answers

My personal Credit Isn't Always Good. Will This Affect My Chances Of Being Approved For Cash Advance?

Of course it will . they look at all aspects when approving loans and payment history is a biggie

Mar 18, 2016 | The Computers & Internet

1 Answer

Does the interest rate change the more i withdraw from my line of credit?

No. The interest rate stays stable in almost all lines of credit. You can freely withdraw from the line up to the pre-assigned credit limit.

Aug 26, 2013 | Finance

1 Answer

Is there always an annual fee for a line of credit?

There usually is an annual fee for lines of credit, the average being around 20$. However not all banks require this payment.

Aug 26, 2013 | Finance

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