How does a line of credit work? A line of credit is an extension of money that one of our banks makes available in your checking account during a certain period and with a maximum limit that will depend on your own solvency.
Your account has been set to zero, you need fast money and you still do not know how a line of credit works . Whether you are a private individual or a company, learn these 4 fundamental things and apply for your credit online .
An online credit in which you decide how much to pay each month
You have not yet charged, the mortgage has eaten your entire budget and you’re already looking forward to the extra Christmas. Many of us look for instant liquidity, and one of the best ways to get it is by requesting a line of credit, that is, requesting an online credit or loan from your bank account that you will return day by day through interest and that will allow you to pay an emergency or paying certain daily expenses that you are not willing to do without.
Once the amount and period of repayment of your line of credit has been agreed (with a percentage of interest only applied on the economic amount you use), you will only have to reimburse the total of the financed money, or, on the contrary, extend the credit if you reach an agreement with the bank.
How is a line of credit different from a loan?
In the traditional loans an exact date is established on the days of payments, as well as on the amount to be paid, while the lines of credit are more flexible in terms of the use of available money, obtaining, for example, up to 500 euros in 15 minutes through the signature Ferratum Money or € 1,200 instantly to return them in 12 months through CreditoSi .
In addition, while in a current loan you will pay the interest for the total balance that you have requested, in a line of credit you will only do it for the liquid money that you use, without worrying about the rest.
Another advantage of asking for a line of credit is its immediacy , since access to money is immediate and avoids, for small and medium-sized companies as well as for individuals, waiting times that may lead to the disorganization of the company or your own personal or family situation.
In addition, with the credit line you do not have to determine exactly the amount of funds that are requested (whose interest will depend on the amount withdrawn) and you can renew the contract once the time has ended. On the other hand, the convenience of being able to access it online and avoid hours of paperwork in the bank since its operation is similar to that of a current account . You can always get out of a hurry when paying payroll, repair machinery or suppliers, or serve to fix that blow you gave the car in the garage and buy that latest model phone with retina HD screen.
Types of credit lines
Depending on whether you are a company or an individual, you can choose an open line of credit that suits your needs. Revolving lines of credit are useful for SMEs , since with this money you can pay discount of invoices, letters or purchase orders, perform contracts, or capital goods (purchase of machinery, equipment or fixed assets) and even make inventory or solvency of stock The same applies to the overdraft lines , which will provide facilities for businesses with a high turnover rate.
On the contrary, if you are a private individual, you can bet on non-revolving credit lines , that is, extendable in time since you can renew it after its expiration.
To request a line of credit from home:
It’s easy, fast and you can do it from the couch . You only have to choose an entity through our page, show your income with a payroll , unemployment or pension and pretend that you do not have any delinquency notes. From there, what you do with your money is yours!