A line of credit is an agreement by a commercial bank or vendor,other financial institution
to extends a specified amount of unsecured credit for a certain time to
a specified borrower. It is a good alternative when you're unsure how much
you need, or when you'll need it.You can use or spend up to your pre-assigned
credit limit.
A loan on the other hand, is good when you know exactly how much money you need.You
borrow a certain amount of money at a fixed interest rate for a specified
length of time.The fixed monthly payments include all the interest charges
and fees, and reduce the amount of the loan until it is fully paid.
Credit can assist you to pay for expenses such as a home, car, college
education or even a holiday abroad, but it's also convenient for smaller
purchases. Used wisely, credit can help you manage your finances, and can
be especially useful for emergencies.
The type of credit you choose may depend on a combination of what you need the
credit for, how much you want to borrow, which type of credit offers the best
interest rate, and your collateral (property or funds you can pledge to secure
the debt).
PERSONAL LINE OF CREDIT
HOME EQUITY LINE OF CREDIT
