A line of credit is a ready source of funds from a bank or lending institution. It can be used for a variety of purposes, including unplanned expenses, family vacations, auto repairs and college tuition.
A Pre-Approved Loan
The line of credit costs nothing until withdrawals are made. After that, it can be repaid in monthly installments or all at once.
Another Credit Source
Some borrowers like the line of credit because it allows them to use their credit cards for day-to-day purchases, while reserving the line of credit for big-ticket items.
Bill Consolidation
Other people use their line of credit to pay off high interest rate credit card bills and other debts. That may result in a lower overall monthly payment, as well as significant savings on finance charges.
Great for Seasonal Workers
The line of credit can be excellent for temporary or seasonal workers, giving them access to cash for living expenses until they resume working.
Tax Time
Many consumers also tap into their credit lines to pay property taxes or federal income taxes. They appreciate the peace of mind that comes with knowing the credit line will be there when they need it.
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