How to Get a Line of Credit?
Instead of providing a huge sum of money, personal lines of credit (LOC) provide variable amounts. Credit lines of this kind allow users to borrow in increasing rates and repay them according to convenience and then borrow again as long as the line remains open. Generally, you have to pay interest on borrowed amounts when the line is open for borrowing. This makes it different from conventional loans, which need to be paid back in fixed amounts.
Applying For a Credit Line
Personal lines of credit come under the category of unsecured loans. Therefore, you will not have to offer collateral to protect the lender in case you default. This also means that they are different from home equity lines of credit (HELOCs) where the equity of your home is used as security.
Risk is involved in all spheres of lending. Hence, interest on a LOC would be slightly higher than that on a HELOC. Make sure you convince the lender that lending you money is a safe option for them. You have to prove that you have not defaulted on loans, and in a span of many years. A higher credit score also boosts your chances of being approved for a line of credit.