Most of us find ourselves in a financial pinch at times but are you aware of how a personal line of credit can help you? A personal line of credit is a great way to get the cash you need when you need it.
You can have access to the money for a specific period of time to get yourself back on your feet. There is a preset payment plan when you apply, and it works much like a credit card.
How a Personal Line of Credit Can Help You in a Financial Emergency
A personal line of credit works similarly to a credit card. You are allowed a certain amount of money that you can draw either through your account or with a check.
The interest starts on the amount of money you take out and stops when the money is repaid. That money is then returned and available again, should you need it,
A personal line of credit is also similar to a loan, as you can get it at most financial institutions. If you are wondering how a personal line of credit differs from a loan or a credit card there are a few ways.
Personal Line of Credit vs Loan
Some places may not give you a loan if you have bad credit or no credit rating at all. Plus, some banks or credit unions may not give you a small loan, which is maybe all you need.
When you apply for a loan, the interest starts right away. Unlike a personal line of credit, you only pay interest on the money you are using. There may also be certain periods where you can draw on the money and then a period where you need to make payments.
If you get too far behind, you may need to pay off the outstanding debt on the line of credit. A loan gives you a lump sum of money that requires the payments to start right away.
Personal Line of Credit vs a Credit Card
Both credit cards and a line of credit have a set limit of funds. The credit card you can access right away, the line of credit can be accessed with checks or a transfer of funds to your account.
Both require payments and the interest is added on to the money owed, but not the unused funds. Both can have high interest if you let the payments get ahead of you.
How a Personal Line of Credit can Help You with Financial Emergencies
How a personal line of credit can help you is that you may have an easier time getting one. Bad credit can keep you from getting a credit card or a loan from a bank.
You don’t need to put up collateral when you get a personal line of credit, which can be a deal-breaker for people who are already struggling to make ends meet. If you need a bit of a boost financially, a personal line of credit can help.
If you have experienced a slow-down at work or you work as a freelancer, you may have intermittent income. Car problems are a big reason people need help as they depend on their cars every day.
If you need assistance, contact us here at Cash Link today. Don’t find yourself stranded with anywhere to turn. A personal line of credit gives you flexibility and the money you need when you need it.