See These Different Types of Personal Lines of Credit

A personal credit line is a bank loan that closely resembles a credit card in the sense that you can borrow the money from your credit line and then pay it back within a set time. 

Personal lines of credit are often used for large purchases and projects. They are often used for things like home remodeling, but also might be used for an expensive holiday, emergency medical expenses, or college tuition.

There are a lot of different types of credit lines out there, each with its complexities and uses. Up next we’re going to tell you about the different kinds of lines of credit you can get.

See These Different Types of Personal Lines of Credit
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Unsecured Lines of Credit

An unsecured line of credit allows you to take money out without having to provide security or collateral.  

The sum of available credit is replenished when you repay the unpaid balance-meaning you can borrow against it again and again.

Secured Lines of Credit

This line of credit allows you to take out a certain amount of money at any time, but the amount you can take out will depend on the collateral or security you provide. So if you provide $10,000 in security, that’s how much you can borrow.  

Personal Lines of Credit

With this credit line, you have access on a revolving basis to unsecured funds that you can borrow and repay. 

Although there are some general requirements that you need to fulfill to be eligible for these types of credit lines, some significant variations will depend on the lender in this sector. 

For instance, you usually need a credit score of 680 or higher if you’re trying to obtain a personal line of credit from a bank.

Home Equity Lines of Credit

A home equity credit line, also known as a HELOC, is a home-secured credit line that allows you a revolving credit line based on the value of your house.  You can use the money for things like consolidating higher-interest rate debt.

Business Lines of Credit

A business line of credit is a revolving loan providing access to a fixed amount of capital that can be used to fulfill short-term business needs when necessary. 

A line of credit is one of the methods that an organization can use to fund short-term needs for working capital, such as buying inventory.

Uses for Lines of Credit

Personal credit lines can be used for almost anything, but failing to repay them on time can lead to major financial issues.

Lines of credit can come in handy if you find yourself in the following circumstances.


You are self-employed or working on commission, and you don’t have a steady income. One month, you might do very well and the next not so much. In this situation, a credit line can help get you through the tough spots. 


You might have dug yourself into a hole over time with numerous credit cards. These cards come at a high-interest rate, whereas a line of credit has a lower interest rate. With a line of credit, you can merge the debt, and pay less. 

Overdraft Safeguard 

A line of credit will serve as a backup when you need overdraft insurance if you are a regular check writer with unreliable revenue.

This can also be an opportunity for business start-ups. If you want to purchase a company or trigger growth by ads, marketing, or participating in trade shows, a credit line can help.


Personal lines of credit also have lower interest rates than credit cards, making them a much better borrowing option. Instead of a lump-sum, single-purpose loan, they also provide flexible access to cash. 

A line of credit can be used for many things like paying student debt, tuition, purchasing a car, and more.  

See These Different Types of Personal Lines of Credit
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Although you can have several credit lines simultaneously, it is essential to ensure that you can make all your payments. If you can’t keep up, you could lose access to your credit line.