Personal Line of Credit Definition
Personal line of credit (PLOC) comes under line of credit (LOC), which allows the borrower to borrow as much s/he wants from that line of credit till the maximised limit. It can be for personal (home improvement etc.) or business use. The amount that has only been borrowed needs to be repaid with interest. It can be borrowed over and over again.
The PLOC can be claimed by those who are not defaulters. Only the personal savings of the borrower is enough as personal LOC does not require any collateral. These line of credit is used for emergency situation or in any such situation which requires lump sum amount to get cleared.
Personal Line of Credit Calculator
The calculator that calculates the personal LOC, requires some basic information. They are, the latest or current balance, the rate of interest, the change rate of interest, the total paid off goal, the present monthly payment, the charges which are additional specially monthly and finally the annual fee. The calculating tool is just an instrument to chalk out the details of this line of credit. It will only show the user
the mathematical numbers and won’t help the borrowers with any sort of advice. For receiving the latest information about the personal LOC, one must talk to the professionals.
Personal Line of Credit Rates
The personal LOC interest rates are often variable and not fixed. The loan amount which can be borrowed comes in between $1000 – $100000. The average APR starts ranging from 10% to 28%. The fees on personal LOC can be charged only for one time each month.
The rates will deeply vary depending on the prime rates based on the markets. These credit is used to fund the unexpected expenses of large amounts. The lenders solely determine how much money to lend that relies on the rates and the credit score of the borrower.
Personal Line of Credit vs Personal Loan
The very basic difference between personal LOC and personal loan is that, the latter one can be claimed all at once. The amount which is claimed remains fixed, the repayment amount remains fixed which again needs to be paid back within a perfect fixed span of time. But, personal LOC, can be borrowed to the largest limit of thatcredit line and can be borrowed all over again after the repayment gets completed.
The personal loans are in all terms unsecured and does nor need any asset based security. Whereas, the personal LOC can be either secured or unsecured. There’s an advantage if the line of credit is secured, i.e the borrower might receive good interest rate. Personal loan includes student loans which can only be used for educational purposes.
Personal Line of Credit for Bad Credit
Well, if a borrower wants to receive personal LOC, one of the main factor is to maintain a good credit history. The lenders often reach out to those which does not have bad credit. Some lenders still allows people to take over personal line of credit even with bad credit, but in that case, the rates does not remain convenient enough for the borrowers.
Therefore, to avoid any kind of problem and pressure while getting one self granted of the personal LOC, s/he must maintain a good credit and not a poor one.
Personal Line of Credit vs credit Card
Mostly, both personal line of credit and credit card are almost similar in nature, but there are still few differences which are as follows.
The personal line of credit can be secured as well as unsecured whereas credit cards are for all time needs security in order to lend money.
The rates of the credit cards are a bit of high scale than of personal LOC. The personal LOC rates are mostly in favour of the borrowers.
Credit limits which marks the maximum limit are larger in personal LOC upto which a person can borrow. But, the credit cards offer lower ones. Credit cards receiving end will need to satisfy to the high APRs and also with a good amount of cash advances. On the contrary, the personal LOC, only deals in the mode of cash.
Personal Line of Credit Payment Calculator
For calculating the personal LOC, there isn’t any particular step by step formula. To find out the monthly payment for personal LOC, the lender fixes repayments based on the interest rates, the conditions of the personal LOC and also the balance which remains outstanding.
The personal LOC is a loan which can get itself attached to the checking accounts of the borrowers whose accounts may be running out of money. These LOC helps to cover such period of time for the borrowers. The personal LOC are granted by multiple credit unions such as banks or any other financial institutions.
Thus, the personal LOC will come to each of us’ use for anytime we want. The above article might help my reader to have a bit of fair idea about this LOC along with many comparisons. So, be smart enough before choosing any financing option in your life.
Source: Personal Line of Credit