Line of credit is kind of similar to the credit card facilities. It allows you to withdraw the money anytime up to a certain limit.
Line of credit mortgage allows you to purchase a family home or use the funds for home renovation.
Some lenders require the repayment to be made on monthly basis. Some lenders do not require monthly repayment as long as the balance owing remains under limit.
Most people choose to use the line of credit because of its flexibility.
Line of credit usually offers a larger amount than the credit card so you can freely use the fund to purchase any large asset. You are also allowed to withdraw the fund anytime without seeking approval from the lender.
It can be accessed by using cheque book, internet or phone banking.
Interest rate on line of credit is almost equal to the home loan interest rate. Therefore, most people choose to consolidate their personal loans or credit cards to line of credit for lower repayments.
The line of credit is not a type of account that can be suitable for everyone. As you can freely use the funds in the account to purchase anything you like, there is a chance that you will spend over the limit. Therefore, some lenders may also need to consider about your financial discipline before they grant the line of credit facility.