answersLogoWhite

0


Best Answer
Copy

A line of credit is basically a loan that you only draw on periodically as you need it. Lending institutions, such as banks, will open them for you or your business based on your credit worthiness and charge you interest on the outstanding balance. It doesn't usually cost anything to have a line of credit, but you will have to pay it back with interest once you draw on it.

User Avatar

Wiki User

โˆ™ 2005-10-18 12:52:39
This answer is:
๐Ÿ™
0
๐Ÿคจ
0
๐Ÿ˜ฎ
0
User Avatar

Add your answer:

Earn +5 pts
Q: How does a line of credit work?
Write your answer...
Submit

Related Questions

Do recorded mortgages need an amount?

No. Some are in the form of a credit line or commercial credit line and no amount is recited in the instrument.No. Some are in the form of a credit line or commercial credit line and no amount is recited in the instrument.No. Some are in the form of a credit line or commercial credit line and no amount is recited in the instrument.No. Some are in the form of a credit line or commercial credit line and no amount is recited in the instrument.


How does a revolving line of credit work at a bank?

is the hump in the back of the neck hereditary


How do you get business lines of credit?

You can get a business line of credit by going to the bank and applying for a line of credit. You can also get a line of credit by going to a finance company.


Is a line of credit mortgage bad for your credit score?

A line of credit is not bad by it self. It would be the balance of the line of credit that might raise some questions.


What is the meaning of revolving line of credit?

The meaning of a revolving line of credit is a line of credit that is not linked to a certain number of payments. It is the complete opposite of installment credit.


Line of Credit Payoff?

Line of Credit Payoff When will your line of credit be paid off? Use this calculator to see what it will take to payoff your line of credit, and what you can change to meet your repayment goals.


What is omnibus credit line?

sample format of letter of credit with omnibus line


What happens when paying off an equity line of credit?

Nothing happens when you pay of an equity line of credit. The equity that you used for your line of credit is now safe.


How do you calculate effective interest rate on a line of credit?

how is line of credit interest calculated


What is a gambling line?

A gambling line is a line of credit that a casino grants you in order to gamble. It is a pre established line of credit based on your history with them.


On credit card what is difference between initial credit line and partial line amount?

According to Citi, the partial line amount is the available cash advance amount, and the credit line is the limit on the account


What is the difference between line of credit and revolving credit?

A line of credit is one type of revolving credit, which works similarly to a credit card. Both a line of credit and revolving credit have a set amount available to use, and when you pay down or pay off the amount, the credit is available for you to use again. A line of credit may use collateral to secure the loan, such as a business building, or it may be unsecured or without collateral, such as a credit card.


What is the definition of a home equity line of credit?

A home equity line of credit, often abbreviated as HELOC, is a credit line which is backed up by a second mortgage on the home. The credit is available to the borrower at any time via a check or debit card. Anytime the homeowner spends money from that credit line, that amount becomes part of the balance on the line of credit which will need to be paid back.


How do you use the word credit as a verb in a sentence?

We credit her success to hard work and diligence.We credit her success to hard work and diligence.We credit her success to hard work and diligence.We credit her success to hard work and diligence.


How does one open a line of credit?

The easiest line of credit to open is a credit card. There are many credit cards who, for higher fees and interest rates, specifically target people with poor or no credit. Otherwise, if you open a line of credit with your bank (i.e. get a loan) you have to prove financial stability, and dependability.


Is line of credit available for minors?

No minors are not able to get credit for a number of reasons. One work experience, Two,still in school,and they need to build a work history. The parents are still responsible for them till there of legal age.


How do I get a business line of credit?

You can get a business line of credit from a bank. You can also check with the Small Business Administration.


How do you apply for a equity line of credit?

When you apply for an equity line of credit, you should first make certain that you are choosing the plan that meets your needs the best. After doing so it's simply a matter of filling out and submitting the proper paper work.


Is a line of credit considered a revolving account?

Yes, if the account type is considered a line of credit it will be calculated into your revolving account balance on your credit report.


How does Line of Credit works?

Line of credit works somewhat like a credit card. In this you are provided a credit limit and you can withdraw as much as you like within the limit of the credit assigned to you that too for a fixed tenure. In a Line of Credit you can withdraw and deposit at your will. However, the fundamental difference is that of interest rate. It is much higher in credit cards as compared to Line of Credit. In some Line of Credit offers, such as the ones provided by the Bajaj Finserv, you don't have to pay the EMI by including your principal amount. You only have to pay the interest part and you can pay the principal later once the tenure is over. You can even prepay the amount without any additional charges. The best part of Line of Credit is that you only pay for what you have utilized and not the whole of pre set credit line.


How does one apply for a Chase home equity line of credit?

One may apply for a Chase home equity line of credit loan via the Chase credit website. A Chase home equity line of credit allows one to use their home as collateral for a variable-rate line of credit that can be used for a variety of purposes.


can i claim a making work pay credit ?

can i claim a making work pay credit can i claim a making work pay credit


Is Capital One line of credit expensive?

The Capital One line of credit interest rate is reasonable when compared to similar providers. This is also when considering the various fees and charges applicable to the line of credit.


How long does a business line of credit last?

There is no set time period for a line of credit. As long as your account remains up-to-date, you will have access to your business line of credit.


Home Equity Line of Credit Calculator?

Home Equity Line of Credit Calculator Use this calculator to determine the home equity line of credit amount you may qualify to receive. The line of credit is based on a percentage of the value of your home. The more your home is worth, the larger the line of credit. Of course, the final line of credit you receive will take into account any outstanding mortgages you might have. This includes first mortgages, second mortgages and any other debt you have secured by your home.