A line of credit is a predetermined amount of money that a financial institution has agreed to lend you with the understanding that you will pay interest on the amount you borrow. Flexibility is a key feature of a Line of Credit that allows you to access funds when you need them, as you need them, up to your available credit limit. That's why a line of credit is a great choice for unexpected expenses or ongoing projects.
A line of credit typically has a Draw Period and a Repayment Period. During the Draw Period, the borrower is responsible for monthly payments based on the amount borrowed and has access to use the line of credit. During the Repayment Period, access to funds ends and outstanding balances are paid back in monthly installments as per your agreement terms.
- Interest is charged only on the amount you use.
- Reuse your line as you repay it.
Learn more about line of credit options from Santander.