A credit line also called a "line of credit" (LOC), is a type of standing loan that enables borrowers to take out money as needed, pay it back, and borrow again without having to apply for a new loan.

Customers are approved for a total credit line amount, which will be a percentage of their salary, and can draw against that total amount when it is needed.

There are several times when you might need emergency money. Hospitals do not allow you in unless you can prove that you can afford it. They do not allow you to leave without paying their bill.

Your car might burst a tyre and you need a quick replacement to get you home. A car tyre can be expensive, especially if you don’t have the cash immediately available, but a credit line could come to your rescue here.

Your motorbike might need a quick can of oil, and a full tank of gas to get you to an important meeting. Making the meeting is essential, so paying now and repaying in affordable installments means that your life can continue and you can make that meeting.

Credit lines are a form of revolving credit extended by financial institutions to both consumers and businesses. A credit line's credit limit is the maximum amount of credit that a lender will provide to a given customer. The borrower's income and credit history, among other things, go into establishing the credit limit.

A credit line must always be affordable and a lender should never offer a credit line that is not affordable to customers. Putting a customer in debt means that they will not be able to repay the loan that they have taken, and their drawdown amount will be affected. If they draw money against their credit line, and repay it, they can draw more down, and they always have money available.

Special checks or a debit-like card issued by the lender are sometimes used to spend the money in a line of credit. Other lenders offer cash deposits called drawdowns against the credit line total. Lenders will cover any such checks or transactions up to the approved credit limit.

Because it can be secured by a portion of the company's assets, this form of credit is often used by businesses. Unlike with unsecured loans like credit cards, the interest rate on a line of credit for businesses is typically lower. A line of credit for a customer is also unsecured, no assets are given, so a consumer line of credit or a customer line of credit can offer slightly higher rates of interest, but it is always calculated to be affordable.

Being affordable is the key to lending, and if you can prove that it is affordable, by making your repayments, your credit like gets increased, the amounts of your draw downs gets increased and you can borrow more. Customers must always prove that they can afford their loans without going into debt.

A credit line can serve many functions, both professional and personal. When money is tight, a credit line loan might help you out by allowing you to make purchases, pay bills, or stock up on inventory. To put it another way, you can always pay it off later. Obtaining a credit line is a great way to maintain a high credit score. However, if you keep making payments on time and keep your balances low, your credit score should rise. You can also boost your credibility with creditors.

Improving your credit score means that you can avail of more credit facilities and you can move up to a motorbike, car, or even a house. When you apply for a housing loan, one of the questions you will be asked is for your credit history, and showing that you always make your repayments means that you are creditworthy.

In this demanding and intensely competitive climate, a person needs to be able to adjust to the ever-changing requirements of the market. Your cash flow can remain stable with the help of a line of credit. It does this by adapting to the shifting demands of the market and seizing opportunities that were not anticipated. This drives growth.

Growth might be anything from upgrading your phone, to fixing your car, to making sure that you always have money for health care and important expenses.

Managing your expenses is important, so when you need money, it is always available.

Being trustworthy with your credit means that when you need money, you are trusted to pay it back, and in the world of finance it is easy to build up a trust score - simply repay your loans!

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