Loan Option - Lines of Credit

A line of credit is a loan for a maximum amount set by the lender. It is available through most banks and credit unions. You can borrow any amount up to the maximum, as long as you make the required payments and meet any other requirements.

Like a credit card, a line of credit is a type of “revolving credit”, meaning that you can spend the amount you’ve borrowed, repay it, and borrow it again. For example, if you have a $10,000 line of credit and you borrow $2,000 from it, you will have $8,000 left to borrow. Once you’ve paid back the $2,000 you borrowed (plus any interest and fees), you will once again have $10,000 available to borrow. This can give you flexibility to decide how much you need to borrow.

Like other types of loans, money borrowed from a line of credit will gather interest and there might be fees for late payments or for other things. However, a line of credit will usually cost you much less than some other types of loans, such as payday loans.

If you are thinking of getting a line of credit, shop around for one that best meets your needs. Pay attention to the interest rate (the lower, the better) and any fees.

If you are considering getting a line of credit or another type of loan, there are things to think about.

Remember that you have rights when getting a line of credit or other type of loan.