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What Is a Personal Line of Credit?

A Personal Line of Credit is an unsecured bank loan that gives you ongoing access to a certain amount of credit that you can reuse as you repay the outstanding balance. No collateral is required and you only pay interest on the amount of credit you use.

Perhaps you’ve been considering consolidating debt, upgrading your appliances or home repairs, paying for classes to pick up a new skill, or a much needed vacation. A Personal Line of Credit can be a great borrowing option to meet a variety of needs, including medical expenses.

What Can a Personal Line of Credit Be Used For?

Unlike an auto loan that requires you to use the money you borrow to purchase a car, you can use a Personal Line of Credit to cover expenses for just about anything.

For example, if you’re planning to consolidate your debt into one monthly payment, upgrade existing appliances, or go back to school, a personal line of credit is a good option because you can use as much or as little of the loan as you like. This money can also be used for things like emergency car repairs, medical expenses, or moving into a new abode. Getting a Personal Line of Credit can help you achieve your goals.

Personal Line of Credit key features1 include:

easy money transfers

Flexibility

Thinking about going back to school full- or part-time? Borrow from $5,000 to $35,000 with no collateral required. Then use and reuse your line of credit as you repay it.

competitive money market rates

Competitive

We offer competitive variable rates as low as 9.24% APR with automatic payment from any Santander Bank checking account1.

Accessibility

Access your Personal Line of Credit easily via checks or online account transfers, up to your available credit limit.

The Difference Between a Personal Line of Credit and a Personal Loan

A Personal Line of Credit is a borrowing limit extended to you at a variable rate tied to an index, such as the Prime Rate. The funds are available to you up to a pre-assigned credit limit and you have the ability to re-use your personal line of credit as you repay. Your interest rate and monthly payment amount can change over time and will be based on the current interest rate and the amount of the credit line you have outstanding.

A Personal Loan is a specific amount of money that you borrow at a fixed rate for a specified period of time. You receive a one-time, lump-sum that is paid down through fixed monthly payments with a fixed rate and fixed term.

The decision on which type of loan is right for you depends on your personal situation. Both borrowing options help give you the financial flexibility to make your plans a reality.

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May We Also Suggest?

1Rates: To get a Personal Line of Credit (“Line”) with the annual percentage rate (APR) shown, you must reside in MA, RI, CT, NH, NJ, PA, NY, DE, ME, VT, MD or DC, have or open a Santander checking account, and use automatic payment (ePay) from that account. You must also meet our highest credit standards. For new Personal Lines of Credit, your initial APR is based on the U.S. Prime Rate published in the Money Rates table of The Wall Street Journal (WSJ) on the date you sign the credit agreement. Thereafter, your APR may vary monthly and is based on the U.S. Prime Rate published in the Money Rates table of the WSJ on the first business day of the calendar month, plus a margin of 4.24% APR with ePay from any Santander checking account. Variable line of credit APR (with ePay) ranges from 8.99% to 18.00%, depending on your creditworthiness. Contact us for information about higher rates that may be available to applicants who do not meet those standards. Fees: An annual fee, if any, will be charged during the draw period in the first month after the account is opened and each year thereafter on the anniversary date. The amount of the annual fee will be $0, $25, or $50, based on the type of deposit account you have with Santander at the time the fee is assessed. Draw & Repayment Terms: The Line has a five-year draw period, during which you may obtain advances and elect either principal and interest or interest-only payments. Thereafter, no additional advances may be taken and line enters the five-year repayment period, during which you must repay principal and interest. Other Information: Line use is subject to the terms of the Personal Line of Credit Agreement, including terms that permit Lines to be suspended, reduced, or terminated in certain circumstances. The minimum Line amount is $5,000 and the maximum is $35,000. APRs and other terms are accurate as of 11/01/2019 and may change thereafter. A Santander checking account is not required to qualify for a Line or Loan, but use of ePay from a Santander checking account will result in an interest rate discount. If ePay is discontinued, the interest rate will increase by 0.25 percentage points, and your payment will increase. Line accounts are subject to approval.

 

Accounts must be in good standing. Applies to new net retail purchases only.

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