Line of Credit

A line of credit (LOC) is a type of account that allows you to borrow money when you need it, up to a predetermined limit, by writing checks or using a bank card to make purchases or cash withdrawals. Lines of credit are available from many banks and credit unions and are sometimes referred to as bank lines or personal lines of credit. A personal credit line is a revolving credit that functions similarly to a credit card. You can write checks or use a credit card to pay any amount up to your borrowing limit, and you can make variable payments as long as you satisfy a monthly minimum requirement. You pay interest on the cash borrowed, and when you pay down your balance, your available credit is restored.