Line of Credit FAQ
All About Lines of Credit
? What is a line of credit? ! A line of credit is a preset borrowing limit that can be used by borrowers at any time for whatever use they require.
? Why apply for a line of credit instead of a lump sum loan? ! The line of credit offers you a more flexible borrowing option, being generally more suitable if your borrowing needs vary. You can access any portion of your line of credit, up to the maximum amount, at any time.
? Do lines of credit have any drawbacks vs. lump-sum loans? ! In some cases, lines of credit end up costing more than lump-sum loans.
? What are the requirements for getting a line of credit? ! In order to qualify for a line of credit, the applicant must: (1) Be at least 18 years old; (2) Be a citizen or a permanent resident of the US; (3) Have a proven source of income; (4) Have a valid email address and an acceptable checking account.
? How much is the interest on a line of credit? ! The interest on a line of credit depends on the lender. Contact your lender directly to get the exact figures. The interest applies only to the amount you actually use. So if you are approved for $500 and borrow only $200, you will only be charged interest on the $200.
Managing Your Line of Credit
? Do I need to use all of the credit I am approved for? ! No. You can use all or any part of the agreed amount.
? When are line of credit payments due? ! The payment schedule will be determined by the lender. Usually, your payments are monthly, or they can be set up to coincide with your paydays.
? How can I change the payment due date of my line of credit? ! Contact the lender directly if you want to request the change of the payment due date of your loan.
? Can I set up automatic payments? ! It depends on the terms and conditions offered by your lender. You should contact your lender directly if you want to request the setting of automatic payments.
? How can I see how much credit I have left? ! The direct lender should provide you with tools to check on your credit balance at any time.
? Can I borrow more after I pay off my principle? ! Yes, you can.