How Lines of Credit Work and How to Apply for Them

Life happens, good and bad. Financial needs arise, as well. Maybe you need to do some renovations on your home? Maybe your daughter is accepted to an Ivy League school and you need some help with filling in the financial gap? Maybe you have long-term medical costs that are not completely covered by your insurance? Whatever the reason, sometimes you need help available to you, on your terms.
A line of credit is a type of loan that doesn’t give you one lump sum of funds like conventional loans do. These loans are similar to a credit card in that you are able to draw on the money when you need it. Unlike credit cards, however, interest rates are generally lower on lines of credit and the amounts available are higher. With a traditional loan, you typically get a chunk of money and immediately start repaying the loan. A line of credit allows you to borrow the money only when you need it and you only make payments on the credit you’ve actually used.

Personal Line of Credit and Business Line of Credit are the two main types of loans available. Both will have a limit set by the lender, as with a credit card. Personal Lines of Credit are secured by personal property, such as a house or car, which can be seized if the borrower fails to repay the loan. These are also referred to as Home Equity Line of Credit (HELOC), which you would get from your mortgage lender or financial institution.

Business Lines of Credit are like Personal Lines of Credit in that they are based on equity, or your ownership interest in something. A business line of credit is secured by your business’s assets including real estate, company vehicles or even furniture. Just as a person might use a line of credit for something big like tuition or home renovations, a business line of credit can be used to cover a large expense such as a building expansion or a software upgrade for the entire company.

Whatever you may need a Line of Credit Loan for, Globenet Capital Group is here to help you wade through process. We have many of lenders to choose from and our team of professionals are ready to assist you in deciding which type of loan is best for you.

Call us today at 877.281.0678!

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