Do you know what a credit line is?
Nowadays, the possibilities to borrow money are becoming more and more diverse, thus making the offers more convenient and profitable. In addition, if in the past long-term loans were offered only by the banking sector, you can now also choose this type of loan from non-bank lenders. One of the long term credit options is the credit line.
What is a credit line?
A good credit line is a loan that has been known and demanded for a long time in the world. However, non-bank lenders in Latvia have started offering this type of loan relatively recently. If you are considering the idea of using it, find out the main differences between a credit line and other non-bank loans:
- maturity of the loan – you can spend the funds granted under the credit line for an unlimited period, paying interest only on the amount you spent;
- Usage – you can spend money gradually, using only the amount you need at the moment;
- repayment method – the loan is paid off in monthly or monthly installments, paying interest only on the amount of money you used. Until you start using the money, you will not be charged. If the credit line is not used for some time, the borrower will not have to make any payments.
If a credit line seems to be the best option for you, read on to find out what the terms of the credit line agreement include and what you need to get a good credit line.
Basic conditions for obtaining a credit line
A credit line agreement allows you to borrow an amount of up to one and a half thousand USD on average, though in some cases a higher or lower amount may be available to borrowers. An individual credit limit is set for each borrower and how much you qualify for depends on your income and financial situation. Review the basic requirements for lenders to see if a credit line is the right service for you!
- In order to get a loan, you must be solvent and have a positive credit history. What does it mean? First of all, the amount of the credit line has to be commensurate with the monthly income level, as each loan implies additional costs. Lending experts have estimated that no more than 20-30% of total income should be spent on credit payments each month, as higher spending exposes the borrower to unnecessary risk. Note that the minimum monthly payment is different for each lender, so a credit line, like a quick or consumer credit, must be sought individually.
The amount of the payments is included in the credit line agreement, which you must read before applying. Only a contract will help you understand whether the service offered is a credit line that is beneficial to you.
- To make sure that you are able to repay the loan within the term specified in the credit line agreement, without creating a financial shortfall in your own pocket, the lender may request information about your income and expenses. You should also inform the lender of your existing credit obligations, as not every person’s budget is large and stable enough to withstand another monthly loan payment. The credit line is commensurate with the borrower’s financial situation, so the lender has the right to offer a lower credit line or refuse service if the credit line can adversely affect a person’s ability to pay.
And yet, despite these conditions, a credit line is a relatively easy-to-obtain service. Applicants do not need a pledge or a surety, and most comfortably, a credit line can be opened in less than 15 minutes *. The credit line is available to permanent residents of Latvia from the age of 20 or in certain credit institutions from the age of 20.
If you meet the basic requirements of lenders and believe that a credit line may be useful to you, find out how to apply for this financial service!
How to apply?
Once you understand what a credit line is and think it is the best financial solution for you, there are three steps to getting money in your bank account:
- fill in the form on the lender’s website;
- confirm your data by transferring 0.01 Euro to the lender;
- wait for the creditor to respond and accept the offer.
If the details are correct and you meet all the conditions to get a loan, a credit line agreement will be prepared and you will be able to receive the lender’s offer directly to you within a few minutes of applying. The credit line agreement is prepared electronically and is valid without signature, so you can start using the credit limit granted without leaving home.
If you can’t decide whether a good credit line is the right loan for you, non-bank lenders also offer popular solutions such as online cash loans. We, the most trusted lender Eustacia Vye, offer you the opportunity to borrow money for the first time from 50 to 400 USD, and again up to 1500 USD. You can repay it of your choice – in one payment within 30 days or in installments within 24 months.
Which loan to choose?
Each type of credit has its pros and cons:
- A good credit line will come in handy if you know the final amount you want to spend on a particular spend, but you can’t predict exactly when and how much money you will need at any given time. Within your credit limit, you can gradually withdraw the necessary amounts, as the credit line is not credited to your bank account in full. Likewise, a good credit line will be suitable for those who wish to secure a backup option so that funds are available when needed. The credit line is so easy to use that you don’t have to spend it straight away and don’t pay for it;
- quick loan, on the other hand, is an appropriate form of credit for people who want to repay their loan after 30 days or evenly in similar payments over a longer period of time. Fast credit can be a handy solution in situations where a specific amount is urgently needed. A quick credit is usually applied to solve everyday cash problems, but a good credit line is a loan with more flexible terms and broader uses.
Top reasons for borrowing
Loans on the internet are most often used for some important purpose or purchase, such as:
- purchase of household appliances;
- Car service;
- home repairs;
- medical expenses;
- tuition, course fees.
Often these expenditures tend to be unplanned, which is why, for example, a credit line of 20 years is offered so that funds are immediately available. However, no matter how urgent the money may be, be sure to consider the following points before borrowing!
Regardless of the type of loan you choose, carefully consider your financial situation so that you can repay the loan on time. A credit line agreement sets a monthly payment deadline that must be met to avoid being on the list of debtors and avoiding penalties. Remember, even after you have paid off your loan, you still need to have enough money to cover your daily expenses.
Although a good credit line can often tempt you to borrow more than you need to because you can spend your money gradually and pay only for what you use, always choose the lowest amount possible! An advantageous credit line is first and foremost a thoughtful loan that you apply for after all. Before borrowing, carefully read all the points in the credit line agreement and remember that late payments can damage your credit history.