Lines of Credit

A line of credit is a revolving credit agreement that allows a borrower to access funds as needed, up to a pre-approved limit. It’s similar to a credit card, but typically offers larger credit limits and lower interest rates.

Key features of lines of credit:

  • Revolving credit: Borrowers can withdraw funds as needed and repay them over time.
  • Interest only: Typically, only interest is charged on the amount borrowed.
  • Annual fee: Many lines of credit have an annual fee.
  • Credit limit: A pre-approved maximum amount that can be borrowed.

Lines of credit can be a convenient way to access funds for unexpected expenses or short-term needs. However, it’s important to use them responsibly to avoid accumulating debt.

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