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5 Things you need to know about a Line of Credit

Here are few essential things to know about how to get a Line of Credit

A line of credit is nothing but a flexible loan provided by the financial institution. An individual or business can avail a line of credit also known as revolving credit. Similar to a credit card which has a limit to how much you can spend, a line of credit has a maximum limit under which you can utilise the funds as per your need. The amount under LOC can be accessed anytime and is to be repaid as soon as possible. The most attractive part of the Line of Credit is that you have to pay interest rates only on the amount that you use and not what you borrow. 
 
Many people are growing familiar with the line of credit service. Most popularly the ones which Non-Banking Financial Companies (NBFCs) are providing. They see it as the most convenient credit option regarding flexibility and repayment. However, many people are interested in taking a line of credit but are not well versed with how things work with regards to line of credit. If that is the case, then you are at the right place. 



Here are few essential things to know about how to get a Line of Credit: 

Decent Credit Score: First and foremost, the most important aspect when borrowing a line of credit is the credit score. A credit score is an instrument which helps the financial institutions in determining the financial capabilities of a borrower. Under a credit score, every minute detail about the borrowers’ credit history is mentioned, this helps the financial institutions to analyse whether a borrower looking for a line of credit is creditworthy or not. 

Up-To-Date Documents: Regardless of the loan type, documents are something which no financial institution would comprise on. Yes, there are Non-Banking Financial Companies (NBFCs) who might consider your case due to their flexibility, but that does not undermine the importance of documents. Even they will emphasise on the requirement of up-to-date documents. Before you opt for a line of credit, it is essential that you get ready with all the required documents. 
 
Clean Financial History: To avail a line of credit facility, it is imperative that you have a clear financial history. If you have failed with payments in the past and still struggling to pay off the existing loans, the chances of getting a personal line of credit are minute. One of the most important things that a lender looks for in your Credit score is the financial history. 
 
Proper Management of Existing Loans: There is no obligation when it comes to opting for a line of credit with existing loan. However, it is essential that you manage the two properly. Your regular loan will require you to pay monthly EMIs. On the top of it, if you borrow a line of credit, it is crucial that you manage it effectively. Thus, opt for a line of credit only when you have a decent financial standing. 
 
Decent Rapport with the Lender: Never undermine the relationship with a lender. An honest relationship can work wonders even during the toughest of financial situation. Communicate your ideas and plans with them; they will suggest you how to go about them. Be open and frank with them, once they trust you and your plans, they will go to a certain extent to help you meet your needs. 
 
Lastly, it is advisable to consider an NBFC ahead of a bank when it comes to getting a line of credit. They offer flexible options along with added benefits. Thus, check them out before you decide on alternatives. 

5 Things you need to know about a Line of Credit
5 Things you need to know about a Line of Credit

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5 Things you need to know about a Line of Credit

Here are few essential things to know about how to get a Line of Credit

Here are few essential things to know about how to get a Line of Credit
A line of credit is nothing but a flexible loan provided by the financial institution. An individual or business can avail a line of credit also known as revolving credit. Similar to a credit card which has a limit to how much you can spend, a line of credit has a maximum limit under which you can utilise the funds as per your need. The amount under LOC can be accessed anytime and is to be repaid as soon as possible. The most attractive part of the Line of Credit is that you have to pay interest rates only on the amount that you use and not what you borrow. 
 
Many people are growing familiar with the line of credit service. Most popularly the ones which Non-Banking Financial Companies (NBFCs) are providing. They see it as the most convenient credit option regarding flexibility and repayment. However, many people are interested in taking a line of credit but are not well versed with how things work with regards to line of credit. If that is the case, then you are at the right place. 



Here are few essential things to know about how to get a Line of Credit: 

Decent Credit Score: First and foremost, the most important aspect when borrowing a line of credit is the credit score. A credit score is an instrument which helps the financial institutions in determining the financial capabilities of a borrower. Under a credit score, every minute detail about the borrowers’ credit history is mentioned, this helps the financial institutions to analyse whether a borrower looking for a line of credit is creditworthy or not. 

Up-To-Date Documents: Regardless of the loan type, documents are something which no financial institution would comprise on. Yes, there are Non-Banking Financial Companies (NBFCs) who might consider your case due to their flexibility, but that does not undermine the importance of documents. Even they will emphasise on the requirement of up-to-date documents. Before you opt for a line of credit, it is essential that you get ready with all the required documents. 
 
Clean Financial History: To avail a line of credit facility, it is imperative that you have a clear financial history. If you have failed with payments in the past and still struggling to pay off the existing loans, the chances of getting a personal line of credit are minute. One of the most important things that a lender looks for in your Credit score is the financial history. 
 
Proper Management of Existing Loans: There is no obligation when it comes to opting for a line of credit with existing loan. However, it is essential that you manage the two properly. Your regular loan will require you to pay monthly EMIs. On the top of it, if you borrow a line of credit, it is crucial that you manage it effectively. Thus, opt for a line of credit only when you have a decent financial standing. 
 
Decent Rapport with the Lender: Never undermine the relationship with a lender. An honest relationship can work wonders even during the toughest of financial situation. Communicate your ideas and plans with them; they will suggest you how to go about them. Be open and frank with them, once they trust you and your plans, they will go to a certain extent to help you meet your needs. 
 
Lastly, it is advisable to consider an NBFC ahead of a bank when it comes to getting a line of credit. They offer flexible options along with added benefits. Thus, check them out before you decide on alternatives. 

5 Things you need to know about a Line of Credit
5 Things you need to know about a Line of Credit

image
Business Standard
177 22

5 Things you need to know about a Line of Credit

Here are few essential things to know about how to get a Line of Credit

A line of credit is nothing but a flexible loan provided by the financial institution. An individual or business can avail a line of credit also known as revolving credit. Similar to a credit card which has a limit to how much you can spend, a line of credit has a maximum limit under which you can utilise the funds as per your need. The amount under LOC can be accessed anytime and is to be repaid as soon as possible. The most attractive part of the Line of Credit is that you have to pay interest rates only on the amount that you use and not what you borrow. 
 
Many people are growing familiar with the line of credit service. Most popularly the ones which Non-Banking Financial Companies (NBFCs) are providing. They see it as the most convenient credit option regarding flexibility and repayment. However, many people are interested in taking a line of credit but are not well versed with how things work with regards to line of credit. If that is the case, then you are at the right place. 



Here are few essential things to know about how to get a Line of Credit: 

Decent Credit Score: First and foremost, the most important aspect when borrowing a line of credit is the credit score. A credit score is an instrument which helps the financial institutions in determining the financial capabilities of a borrower. Under a credit score, every minute detail about the borrowers’ credit history is mentioned, this helps the financial institutions to analyse whether a borrower looking for a line of credit is creditworthy or not. 

Up-To-Date Documents: Regardless of the loan type, documents are something which no financial institution would comprise on. Yes, there are Non-Banking Financial Companies (NBFCs) who might consider your case due to their flexibility, but that does not undermine the importance of documents. Even they will emphasise on the requirement of up-to-date documents. Before you opt for a line of credit, it is essential that you get ready with all the required documents. 
 
Clean Financial History: To avail a line of credit facility, it is imperative that you have a clear financial history. If you have failed with payments in the past and still struggling to pay off the existing loans, the chances of getting a personal line of credit are minute. One of the most important things that a lender looks for in your Credit score is the financial history. 
 
Proper Management of Existing Loans: There is no obligation when it comes to opting for a line of credit with existing loan. However, it is essential that you manage the two properly. Your regular loan will require you to pay monthly EMIs. On the top of it, if you borrow a line of credit, it is crucial that you manage it effectively. Thus, opt for a line of credit only when you have a decent financial standing. 
 
Decent Rapport with the Lender: Never undermine the relationship with a lender. An honest relationship can work wonders even during the toughest of financial situation. Communicate your ideas and plans with them; they will suggest you how to go about them. Be open and frank with them, once they trust you and your plans, they will go to a certain extent to help you meet your needs. 
 
Lastly, it is advisable to consider an NBFC ahead of a bank when it comes to getting a line of credit. They offer flexible options along with added benefits. Thus, check them out before you decide on alternatives. 

5 Things you need to know about a Line of Credit
5 Things you need to know about a Line of Credit

image
Business Standard
177 22