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When to use a Personal Line of Credit?

Posted by MoneyKey on October 12, 2015
Taking stock of Finances - Pens and coins on a paper

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 can help to alleviate that stress temporary cash shortages can cause. A line of credit is a great way of ensuring you’ll have access to extra funds in case there’s a future unexpected emergency.

A line of credit, from an online direct lender, can allow you up tap into funds, up to $1,000, whenever those needs arise. You will only have to make scheduled minimum payments towards your balance similar to a credit card.

There are a number of situations when you can use a line of credit as a safety net. If you need costly auto repairs the same week your fridge short circuits. Children’s school fees that are due the same day you have to pay upfront for expensive dental work and you know the insurance company will take a few weeks to process your claim. If you’re a consultant or contract worker in between paychecks. 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.

The best part about 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 will only be charged interest on that amount.

Another great thing about your line of credit is, once approved, the loan is yours to do with as you wish. You can make cash withdrawals, if you have the available credit, when and if you need them. However you choose to use it, your line of credit can give you a sense of security during financially unstable times.


Disclaimer: This article provides general information only and does not constitute financial, legal or other professional advice. For full details, see MoneyKey's Terms of Use.

Posted in: Personal Loans

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