Change clothes? The trip of your dreams? Gifts to impress the family this Christmas? Customized credit lines are the best option to deal with small payments that we need on a day-to-day basis. To resort, whenever you need it, to an amount of money. But what is it exactly? What advantages and disadvantages does it have? Are they the same compared to other modalities? We tell you in this post all the details.
What is and how a line of credit works?
A line of credit is an amount of money that we have, but only for a certain time and with the limit agreed between the financial institution and the client. Its operation is similar to that of a current account of money, with the difference that you have a capital that you can use.
Thus, the client can resort to the agreed amount when needed within the established time, but once that period of time has ended, the owner of the credit line must replace all the money used.
These lines can be accessed by any company or individual with the same guarantees and return periods, without providing any information on why they need it. Quick credits for your needs or whims in day to day.
Differences between a line of credit and other modalities
Do not confuse a line of credit with other forms of quick financing such as quick loans. In this case, the main difference is that the loan is received the amount of money requested and is returned within a set period of time. In the case of the credit line, the client is given the possibility of having the money when he needs it.
With regard to microcredits on the Internet, the credit line allows cash to be available in a larger amount and usually for longer periods of time.
Main advantages and disadvantages of a line of credit
The main advantages of the credit line are:
- We have money instantly when you need it
- You only have the amount you need
- You only pay for what you use
But they also have a disadvantage over other forms of financing:
- They can have higher commissions for having the money always available to you
Undoubtedly, a line of credit is an interesting option to have money instantly for a period of time. A line of credit will provide you with the money you need to enjoy everything you’ve always wanted to do.
However, when it comes to a punctual need for quick money, in hemibank you can request up to € 1,000 and in a few minutes you will receive your answer.