A line of credit is offers more flexibility and affordability compared to other financing options, such as a loan or a credit cards. This makes it ideal for things like debt consolidation, home improvement, or even checking off a few items from your bucket list.
A line of credit is like a cross between a loan and a bank account. The lender gives you a certain amount, but you aren’t charged for any of it until until you “withdraw” some. Plus, you can access only a small portion of it if you prefer.
Here are 3 ways line of credit is better than other options:
1. Interest is charged on only the used portion
Unlike a personal loan, which charges you interest on the entire amount, line of credit interest is charged on only the used portion. This means the interest portion of your payment would be lower than with a loan.
2. Interest rates are lower than credit cards
Interest rates on lines of credit are typically lower than on most credit cards, which makes it easier and quicker to pay back than credit cards. There are also fewer fees than credit cards.
3. You can withdraw at any time
Just because you were issued a line of credit, doesn’t mean you need to use it. And as long as it sits untouched, you never pay a cent. Like we mentioned above, even if you do draw on it, you pay only for what you access.
If a line of credit is something you’re considering, please contact us today, so we can answer all your questions.