With a line of credit, the convenience of only having to apply once helps with availability of funds up to your available credit limit 4. Enjoy special discounts on car rentals of up to 25% at participating AVIS and Budget car rental locations worldwide — just present your access card at any participating location to pay from your ScotiaLine Line of Credit account or visit, or call 1-800-TRY-AVIS (879-2847) and quote Avis Worldwide Discount number C219600 7. For Budget, visit or call 1-800-268-8900 and quote Budget Corporate Discount number A363300. For general rates and information about ScotiaLine Personal Line of Credit please call us at 1-888-882-8958.
LOC generally comes with a very high credit limit as compared to the traditional loans where the amount offered is pre-decided by the bank and cannot be modified later. In India, LOC can help in improving millions of lives especially those who do not have a fixed source of income. A lot of these people are in need of constant funds to meet expenses related to marriage, kid's education, home refurbishment, etc. In such cases, since the required funds cannot be estimated, it becomes difficult for borrowers to gauge the amount they want to borrow. Thus, with LOC, they can have the flexibility to access funds that are needed from the total approved credit limit. The borrower can enjoy additional benefits such as reasonable interest rates and payment of interest only on the utilized portion. Today, LOC can easily benefit many sections of the society in India by offering flexible funds at lower interest rates. FAQs 1. How does a line of credit work? Line of credit is very similar to the way credit cards function.
Learn more about each below. Home Equity Lines One of the most common lines of credit for consumers is a home equity line of credit (HELOC). This is a secured loan. Your home's equity—the difference between its fair market value and your mortgage balance—serves as the collateral. Your HELOC forms a lien against your property, just like your first mortgage. Your credit limit is determined by your loan-to-value ratio, your credit scores, and your income. These loans are popular because they allow you to borrow relatively large amounts at relatively low interest rates compared to credit cards or unsecured loans. Banks consider these loans to be quite safe because they assume you'll repay the line of credit to avoid losing your home in foreclosure. Home Equity Loans A HELOC is similar to a home equity loan, but there are some important differences, and the two should not be confused. A HELOC is generally more flexible than a home equity loan. You only borrow what you need when you need it, and you can typically go back for more money if you need to—assuming you stay below your maximum credit limit.
The amount of interest, size of payments, and other rules are set by the lender. Some lines of credit allow you to write checks (drafts) while others include a type of credit or debit card. A LOC can be secured (by collateral) or unsecured, with unsecured LOCs typically subject to higher interest rates. A line of credit has built-in flexibility, which is its main advantage. Borrowers can request a certain amount, but they do not have to use it all. Rather, they can tailor their spending from the LOC to their needs and owe interest only on the amount they draw, not on the entire credit line. In addition, borrowers can adjust their repayment amounts as needed, based on their budget or cash flow. They can repay, for example, the entire outstanding balance all at once or just make the minimum monthly payments. Image by Sabrina Jiang © Investopedia 2020 Unsecured vs. Secured LOCs Most lines of credit are unsecured loans. This means the borrower does not promise the lender any collateral to back the LOC.