Every business owner knows the value of a line of credit, but they’re also an attractive option for personal finance if they’re used responsibly.

A line of credit is a specified amount of credit that can be used again and again after it’s paid off or paid down. Take, for example, a consumer who has a $10,000 balance on a $10,000 line of credit. Once a $2,000 payment is made, the consumer has another $2,000 of available credit without having to apply for or be approved for another loan.

The interest rate on a personal line of credit is often lower than on a credit card, but higher than that of a home-equity line of credit. After all, it is an unsecured loan, and compared to a loan secured with a car or a house, unsecured loans always carry higher interest rates. Of course, for someone who either doesn’t own a house or is a homeowner doesn’t have much equity, a line of credit is really the best option.

A personal line of credit is helpful for expenses you wouldn’t want to put on a credit card, like the nearly limitless costs associated with a wedding. A personal line of credit is a very practical solution for unexpected expenses like emergency car or house repairs. And, as such, can preserve financial security.

The best time to apply for a line of credit is before you need it, and when your credit score is high. If you wait until you’re in financial straits, chances are your score has already suffered a bit, and that could make it hard to get the credit line when you need it most.

A caveat: A line of credit is very convenient. In fact, it may be too convenient for someone who isn’t entirely responsible. Decide how you’ll use your line of credit, and stick to it.

ref=”http://amone.amone.com”>AmOne.com has been a trusted loan and credit leader since 1999. has helped millions of consumers receive the financing they needed.

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