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Personal Line of Credit

September 5, 2018 by MoneyKey

Ideally, everyone would have a bunch of money set aside for a rainy day – an emergency fund that, as all the experts advise, could be tapped into when your car suddenly breaks down or an unexpected medical bill pops up.

Unfortunately, that’s not the case for a lot of people. If you happen to be one of these people who would love to be prepared but may not have the money saved up right now, having a personal line of credit can be an great to help relieve the pressure of unexpected expenses.

personal line of credit can act as a flexible ‘safety net’ you can fall back on for access to funds when you’re facing an unexpected emergency.

What is a personal line of credit?

For some people, there may be a bit of confusion between lines of credit and installment loans because both types of loans are paid back over time. However, there are some key differences. While an installment loan is closed-end (i.e. it’s made available to the consumer as a one-time lump sum) with a set repayment period, a line of credit is open-ended (i.e. allows a consumer to draw additional funds at any time as long as they still have available credit) and doesn’t have a set repayment timeframe.

Unlike a payday loan or installment loan, a personal line of credit is similar to a credit card in that you get access to an approved amount of credit without having to apply again each time you need access to credit. Once approved, you can borrow as much as you want up to your available credit because a line of credit is a ‘revolving credit’. This means that the borrower can spend the money, pay it back and spend it again, in a revolving cycle.

To be more specific, a personal line of credit is a loan that allows you to spend up to a certain limit. They can range anywhere from $200 to $500,000 or more, depending on factors such as your credit score, your income, whether or not you can offer up other things of value like a home or car to “secure” the loan, and what demands you already have on your money for things like car payments, mortgage payments and other loans.

You can check your balance or make additional payments towards your outstanding principal balance at any time. The legally permissible terms of a line of credit typically varies depending on the state in which the line of credit is offered. Be sure to check the state-specific fee and/or interest structure of the product offered by a lender as they may have multiple products if they operate in multiple states.

When should you use a personal line of credit?

With so many loan types available, it may be difficult to decide what kind of loan makes sense for you. A personal line of credit may be helpful for anyone who wants to prepare for unexpected emergency expenses by ensuring that they’ll have access to a small safety net of funds at any time.

There are a number of situations when you can use a line of credit as a safety net, like:

  • If you need to bring your car in for an unexpected repair the same week your fridge short circuits
  • If you need to pay the fees for your child’s school the same day you have to pay upfront for some unexpected dental work
  • You need to take an unexpected trip to the emergency room

The list goes on, but having a line of credit is like having a safety net of cash you can access when you find yourself in a short-term shortage of cash and need to take care of an emergency.

One benefit of a line of credit is that you will only be charged interest on the amount outstanding. This means if you only need to borrow a portion of the total line of credit available to you, you’ll only be charged interest on that amount.

It’s important to remember to use your personal line of credit responsibly and only borrow the funds you require, as you’ll be charged interest and/or fees on any amount you withdraw. It should be thought of as a back-up option to cover your needs, not extra money to buy the things you want.

Applying for a Line of Credit

There are some factors that come into play when applying for a line of credit. A lender may look into your credit score, which is meant to indicate how likely you are to pay back your debts.  They may also look at your current income and a number of other factors.

To qualify for a personal loan or line of credit with MoneyKey, you must:

  • Be of legal age to contract in your state
  • Be a US citizen or permanent resident
  • Be a resident in the state where our product is offered
  • Have an active bank account
  • Have a regular source of income
  • Have a valid contact number and an active email address

If you meet all of the above requirements and are interested in a line of credit, you can apply for one online or by phone.

Some people may prefer to utilize an online direct lender as it only takes a simple online application to find out if you qualify.

However, if you generally find it easier to talk through the steps with a Customer Care agent, by phone may be a better option for you.

When you apply for a personal line of credit, a lender may also looks at your credit history. They will evaluate how much money you make, how secure and sustainable your job and lifestyle are, and how you’ve paid your past debts.

It’s also important to understand the difference between a secure and unsecured line of credit. You may think that in order to get a line of credit, you’ll need to put up some form of collateral, like a house or a car. This is true in the case of a secured credit line – as the collateral acts as the ‘security,’ but in many cases, personal lines of credit are unsecured loans.

An unsecured personal credit line means that the borrower does provide any property or other collateral as a condition for the loan. For unsecured credit, a lender may ask for references as part of your loan application to ensure they have alternate ways to obtain your contact information.

It’s important to go over all the details of your personal line of credit so that you understand what rates and terms apply to you before agreeing to it.


There are a number of ways you can find yourself in a cash crunch situation. Without a substantial savings fund these surprise expenses can be difficult to cover, forcing you to choose which one you need to pay for the most. Finding yourself in this difficult situation can cause a lot of stress and desperation. It is in these moments having access to a personal line of credit is beneficial. It may help to alleviate the stress that temporary cash shortages can cause and it’s one way of ensuring you’ll have access to extra funds in case there’s a future unexpected emergency.

The main advantage of a line of credit is its flexibility. Borrowers can determine how much money they borrow at any given time based on their needs, and will only have to pay interest on the amount borrowed, not on the entire approved credit limit. In addition, consumers can also adjust their payments as needed based on their budget instead of being tied to a loan with a fixed end date. Borrowers can repay the entire outstanding balance at once, or choose to just make the minimum payment and repay the remainder when they’re able to.

If you are approved for a line of credit, it can be a lifesaver in a time of need. Although a line of credit is convenient, it’s important to remember that any amount you draw will incur fees and/or interest so draws should be made primarily for short-term emergency expenses – you should never treat a line of credit as additional cash to be spend on wants.

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Not all applications are approved; duration of approval process may vary. Credit limits/loan amounts are subject to further verification criteria. If you are a returning customer, loan amounts may vary.

*If approved, any requested funds may typically be deposited into your bank account the same business day; timing of funding may vary by product and state. The date and time funds are made available to you by your bank are subject to your bank's policies. For specific funding cut-off times, click here.

**You may request a draw from your Line of Credit at any time, so long as you have available credit and your account is in good standing. In the State of South Carolina, you can withdraw the total credit available to you all at once, or in smaller amounts over time as you need it, with a required minimum draw of $610.

Applications submitted on this website may be originated by one of several lenders, including: CC Flow, a division of Capital Community Bank, a Utah Chartered bank, located in Provo, Utah, Member FDIC. CC Flow will be responsible for underwriting, approving and funding the CC Flow Line of Credit. The CC Flow Line of Credit is available through MoneyKey.

Product availability varies by state. To see loan products offered in your state of residence, please visit our Rates and Terms page.

MoneyKey – TX, Inc. is licensed as a Credit Access Business (CAB), License No. 16641-62815, by the Office of the Consumer Credit Commissioner and registered as a Credit Services Organization (CSO), Registration No. 20110150, by the State of Texas. All loans for which MoneyKey acts as a CSO/CAB are funded by an unaffiliated third-party lender and serviced by MoneyKey. In the State of California, MoneyKey – CA, Inc. is licensed by the Department of Business Oversight pursuant to California Deferred Deposit Transaction Law License No.1004516.

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