Title: What Is a Line of Credit and How Does it Work? | The Simple Dollar
Headings: What Is a Line of Credit and How Does it Work?
What Is a Line of Credit and How Does it Work?
Check Your Personal Loan Rates
In this article
Best line of credit providers for 2020
Suntrust – Highest withdrawal limit
Navy Federal Credit Union – Best for longest draw period
Wells Fargo – Lowest APR
OnDeck – Best for small businesses
BlueVine – Best for entrepreneurs
Bank of America – Best for HELOCs
What is a line of credit?
How does a line of credit work?
Different types of lines of credit
Business lines of credit
Personal lines of credit
Home equity line of credit
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How to apply for a line of credit
Review your credit report
Complete and update your financial paperwork
Compare rates and other important loan terms between multiple lenders
Consider this before applying for a line of credit
How to use a line of credit
Check Your Personal Loan Rates
Alternatives to a line of credit
How does credit work?
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Aleksandra Deric

Content: After application and approval, the funds become available fairly quickly — usually by the next business day. In the case of business lines of credit, the lender evaluates profitability and other business indicators that show the viability of your business and its ability to pay back the borrowed amount. The funds are revolving credit, like a credit card, wherein you only have to repay the balance of what you use. Keep in mind that each time you draw on your line of credit, your monthly payment amount will change based on the balance and length of the term left. Unlike home equity lines of credit, which are secured by the equity in your home, personal lines of credit are typically unsecured, which means the lender will not require collateral as a way of protection if you default. Different types of lines of credit
Lines of credit can be a useful financing option for many occasions or unforeseen events, like completing home renovations, paying for a child’s education and securing additional cash flow for a business. Business lines of credit
Cash flow is one of the key concerns for entrepreneurs and small business owners. A business line of credit can be a useful tool to get your business off the ground. This type of loan is usually used to fund working capital or short-term financing needs, like purchasing inventory, paying tax bills, paying vendors or payroll. If your business is just starting out, a line of credit may be a helpful tool to create more consistent cash flow to cover the unpredictable costs.