We can say that a line of credit is an extension of the money available in an account that a bank makes available to a customer who requests it, for a specific period of time and with a maximum amount of money available, all of this established in advance .
Through a line of credit, the account or card holder has available an amount of money, which can be used in whole or in part. This limit is renewed monthly generally towards the beginning of each month.
The client can use his credit extension at any time without exceeding the contracted limit.
Unlike online credits and microcredits , which are normally granted by private lenders, online credit lines have started to be granted for the most part by traditional banking entities due to the growing number of users interested in this type of product .
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The credit line is used to finance costs and is used by individuals, organizations and self-employed or self-employed workers.
The conditions between credit extensions for companies and individuals do not differ.
The line of credit is intended for those seeking a progressively adaptable loan repayment and for those seeking the security and reliability of constantly accessible money.
In the event that you need financing to pay for a specific unforeseen event, you can visit our credit website where you can discover lenders who offer the first advance with them at 0% interest.
To apply for a line of credit you must follow the following steps :
The return of the money that you are using is carried out comfortably in monthly installments according to what you have agreed with the entity.
The truth is that it is a very flexible loan, you choose in how many installments and the amount of these, to return the borrowed money.
The requirements do not differ much from those necessary to apply for any other fast credit online :
The interests that derive from a line of credit are not based on the total limit of money established but on what you need from time to time.
For example, if you have contracted a line of credit of 2000 euros and this month you need to use 500 euros, you will pay interest for those 500 that you use, not for the 2000 that is the limit.
The interest that is usually charged for these credit lines ranges from 0.30% to 4.2% depending on the entity with which you contract the product.
You have to take into account that there are more expenses, such as the opening commission or the withdrawal commission, the latter can reach 20%.
This depends on the situation in which you find yourself, if it is a small one-off expense, we recommend using a personal loan, since you may pay less interest. Sometimes it may even be free if it is the first loan you request from a lender.
If it is a larger expense, or you do not know exactly how much you will need each month, the best is a line of credit since you will pay only for the money you use, so the expense will always be adjusted or what you really use.
Before this was an exclusive product of lifelong banks, currently online lenders that granted easy loans have also begun to market this financing product.
The advantages they provide are also influenced by this change in who begins to grant them, adding all the advantages of personal loans: