![]() The bank or financial lender will charge interest as soon as money is borrowed, but only on the actual amount of funds accessed, not on the total line of credit. It is also a type of revolving credit account, wherein the borrower can access the money, spend it, repay it, and then access it again. Usually, the borrowers of a LOC can access the funds at any time as long as the agreed credit limit is not exceeded, and timely minimum payments are diligently made. ![]() This type of credit is different from term loans, such as housing mortgages or car loans. A “bank line” or a “line of credit” (LOC) is a kind of financing that is extended to an individual, corporation, or government entity, by a bank or other financial institution.
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