What is a personal line of credit?

A personal line of credit is an account that you can turn to when you need extra funds. You don’t need to borrow from your line of credit, but it’s available if you choose to. And from paying bills to a medical emergency, you can use the money for almost anything (personal, family or household use only – not business use).

The account will have a credit limit, the maximum amount you can borrow at once. But you can also borrow less than the credit limit if you choose.

What’s the difference between a secured and unsecured line of credit?

Personal lines of credit may be secured or unsecured. With an unsecured line of credit, you can borrow the money based on your promise to pay it back. A secured line of credit requires collateral, such as a vehicle, home, savings account, or another type of asset.

A secured line of credit may offer a higher credit limit and lower interest rates or fees. However, they may also be riskier than unsecured credit lines because the lender could make a claim on your collateral if you can’t afford to make payments.

How does a personal line of credit work?

Unlike a personal loan, you’re not borrowing money immediately when you open a line of credit. You’re merely locking in your ability to use the credit line when the need arises.

Once you have a line of credit, you can request a cash advance when you need to, and the lender will send you the money.

Personal lines of credit are revolving accounts. As you pay down your balance, you can borrow against the credit line again up to your credit limit, without having to reapply for a new line of credit.

There may be several fees to consider depending on the financial institution

and how you use your personal line of credit.

These can include:

• An application fee that you may have to pay when you first open your credit line.

• An annual fee, which could apply even if you never use your line of credit.

• A cash advance or balance transfer fee that you pay each time you use your line of credit.

• Interest charges or fixed-amount fees as you repay the loan.

• Prepayment fees, which may be a fixed fee or percentage of your loan amount that you may need to pay if you repay your loan before the end of its term.

*You will only pay a Cash Advance Fee based on how much you borrow. And if you don’t repay the entire balance by your payment due date, you’ll repay a portion of your balance plus a Carried Balance Fee each subsequent billing cycle.

How to open a personal line of credit?

You may be able to open a personal line of credit with a bank, credit union, or online lender.

Elastic offers easy-to-understand pricing, no hidden fees** and no early payment penalty on your Elastic line of credit. You get the convenience of credit, without the usual hassles.

**We will charge a 5% or 10% Cash Advance Fee, depending on your Billing Cycle, for each Cash Advance you request. We will deduct the Cash Advance Fee from the amount of the Cash Advance you request, and deliver only the Elastic Cash amount to you. You are required to pay a portion of your Balance each Billing Cycle, and if you have a Carried Balance of greater than $10, a Carried Balance Fee of $5-$350 will apply. See the Terms and Conditions for additional information at www.Elastic.com/Terms-And-Conditions.