A personal line of credit is a revolving credit account which allows you to draw funds up to a limit. It’s similar to a personal credit card because it allows you to borrow funds as needed, without having to take the full amount in one lump-sum payment. They’re useful for long-term projects with variable costs or for borrowers with irregular income streams. On this page we will discuss what they are and how they work, including some of their advantages and disadvantages.
A personal line of credit is a revolving account. This means that the borrower can use up to his/her given limit as needed, and then pay it back in full when able (along with interest). For example, if one just put $5000 on their card for car repairs but doesn’t have enough cash flow to cover those expenses immediately after receiving them, they could take out more money from their line of credit
The interest rates are high, sometimes up to 39% APR* which can be a significant burden on the borrower. This is especially true for those who want or need funds in smaller amounts because they’ll end up paying more over time with these higher rates than if they had just taken out one big loan from another source like a traditional bank. These loans also require an established credit history - without it, borrowers will not have access to this type of personal lending and may find themselves turning elsewhere. Additionally, some banks charge fees that vary depending on whether you use your card at home (interest free) or abroad ($25 per transaction).