A line of credit means giving extension of any financial source to a person, any business or any firm which needs credit extension. It simply gives access to person whenever he needs. People usually access credit line for biggest expenses like buying new car, managing new home in order to keep balanced other regular expenses. It is given in various forms to borrowers. For example: – Bank overdrafts, demand loan, protection drafts etc. Some special purpose credit lines come in form of export packaging credit, commercial bills purchase, traditional credit card account, discounting etc.
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With line of credit facility, consumer can take benefits of up to $50,000. A borrower is supposed to pay interest fee on actual withdrawn cash for any use. It’s flexible repayment option give full control over financial matters. Even if you are not facing any expenses to meet up, you should apply for line of credit. Because it will ensure you that you are prepared for any emergency expenses in future. You will not need to run here and there in order to borrow immediate cash. Interest rates will be only implied when you will withdraw any cash.
SALIENT FEATURES AVAILABLE ONLY WITH LINE OF CREDIT
ONE TIME APPLY
If you have applied once for line of credit, then credit will be available to you for life time. You need not to worry at all for outstanding expenses because credit will be always with you to meet any financial spending.
An applicant is issued full time access to his credit line. At whatever time he is facing any emergency cash need, he can use any media source to get credit. He can write a check, go directly to withdraw money, ATM facility, Phone calls, online transfer etc for immediate access.
RE-USABILITY OF CREDIT
The most exciting feature of line of credit is it repeatable use over and over again. Once you have repaid anyone of previous credit amounts, you can borrow new credit amount. You gain full control over borrowing and repaying without applying again. One time application comes with life time validity.
Some credit line agencies provide optional low cost insurance plans to its consumers. They provide financial backup to them and their families in case of any life emergency whether it is related to health issues, physical disability or any other major expense.
NO USELESS FUNDS REQUIRED
Unlike other loans, this economic facility does not incur any extra funds or fees for unused credit. You will be charged only on amount you have spent to meet emergency money requirements.
FLEXIBLE REPAYMENT FACILITY
WHAT WORRIES THE CUSTOMERS MOST IS REPAYMENT MODE.
Line of credit provide most flexible repayment mode to its customers. He or she can use any repayment plan well suited to his current budget and expenses. Interest is to be paid with every repayment amount. If you skip any monthly payment, then it can be paid in future with some extra interest rate.
CHOOSE BETWEEN SECURED AND UNSECURED CREDIT DEPENDING UPON YOUR ECONOMIC NEED
The credit plan opted by consumer solely depends upon his financial requirements. Secured means required some of your belongings in form of collateral as a security before lending you credit whereas unsecured credit does not demand anything. A consumer is eligible for unsecured if he is having good credit history, secured ones help in case of poor credit score. Unsecured credit is however available at high interest rates as compared to other scheme.
Though credit lines provide best financial assistance in economic needs, but its usability criteria decides about it financial benefits or its curse. It is always good to repay previous credit amount before taking new one. This will help you in avoiding extra interest rates and balance your expenses.