So, you want to qualify for a personal line of credit: A type of financing that allows you to withdraw funds as needed. They work like credit cards in a sense, but they have much lower interest rates than credit cards.
However, personal lines of credit are harder to qualify for than personal loans, so what makes you more likely to get approved?
How To Qualify For A Personal Line of Credit
It is important that you ensure you meet all the criteria for receiving a personal line of credit prior to applying for one.
Tip 1: Credit Score
When deciding if you want to take out a personal line of credit, you need to ensure you know what your credit score is. Personal lines of credit eligibility are based on creditworthiness.
When you apply, you need to make sure that you know your credit score and that it is a good score because this will demonstrate to the lender that you are worthy of a loan of any kind.
It is possible to receive a personal line of credit with a low or no credit score, but it’s more difficult, and you may have to go to a special lender for this (see tip three below).
Tip 2: Determine The Amount You Need Ahead Of Time
Before you apply for a loan, make sure that you have a general idea of how much money you will need access to on a rolling basis before applying.
Tip 3: Research Banks And Lenders That Work For You
Prior to qualifying for a lender, you need to ensure that the places you want to apply through are perfect for your needs. Some lenders specialize in financing low or no-credit borrowers. There are lenders who would be better for smaller or larger amounts of funding.
Because all lenders are different in their requirements and specialties, it’s best to do some research before applying to lenders if you want the best chance to qualify for a personal line of credit.
What Are Personal Lines Of Credit?
There are some pros and cons to personal lines of credit, like all forms of loans. Personal lines of credit have predetermined limits, and these limits usually range from $1,000 to $100,000. Additionally, this type of loan is a temporary loan.
Personal lines of credit are similar to credit cards because when you use “X” amount of your pre-approved limit, as soon as you pay back “X” amount (and the possible interest on “X”), you are able to borrow that money again.
Personal lines of credit are similar to credit cards, but they aren’t the exact same. You are required to transfer funds to your bank account or write a check, whereas you would simply swipe a credit card.
What You Need To Know About Personal Lines Of Credit
Unlike installment loans, collateral is not needed upon the approval of a personal line of credit. If no collateral is used, then the loan is unsecured, but if collateral is offered to the lender, then it can be a secured line of credit. Most personal lines of credit are not secured, though.
Additionally, filling out an application for a personal line of credit is very similar to filling out an application for a personal loan, which can be a good thing.
When Do Personal Lines Of Credit End?
Personal Lines of credit can be indefinite or can expire after a number of years which is the draw period. If it has an expiration date, you’ll want to find out what the repayment terms will be if you have a balance after the line of credit is due.
Do You Qualify For A Personal Line Of Credit At Cash Link USA?
We love helping those in financial need, and we want to work with you! It’s so easy to apply for a personal line of credit with Cash Link USA!
If you live in Texas, Kansas, Missouri, Tennessee, or Wisconsin and are ready to see if you qualify for a personal line of credit and how much, start with us at Cash Link USA; learn more about what you qualify for by contacting us today!