A line of credit is a revolving credit line that allows you to borrow money up to a pre-approved limit. You only repay interest on the amount used, and the available credit renews as you repay.
- Benefits:
- Provides flexibility to access funds as needed.
- Interest is only charged on the used amount.
- Eligibility:
- Varies depending on lender.
- Good to excellent credit history is generally required.
- Stable income and employment history are important factors.
- How it Works:
- Similar to a credit card, but often with lower interest rates.
- Minimum monthly payments are required, even if you haven’t used the full amount.