line of credit

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Related to Revolving Credit Line: Revolving credit facility, Available Credit

Line of credit

An informal loan arrangement between a bank and a customer allowing the customer to borrow up to a prespecified amount.

Line of Credit

An agreement between a bank and a company or an individual to provide a certain amount in loans on demand from the borrower. The borrower is under no obligation to actually take out a loan at any particular time, but may take part of the funds at any time over a period of several years. This agreement is fairly common in situations in which a business must make payroll but does not always have the operating income to do so, especially when its operating income is seasonal or otherwise varies from month to month. It is also called open-end credit or a revolving line of credit. See also: Credit Card.

line of credit

A credit arrangement in which a financial institution agrees to lend money to a customer up to a specified limit. A line of credit, generally arranged before the funds are actually required, provides flexibility for the customer in that it ensures the ability to meet short-term cash needs as they arise. Also called bank line, credit line, revolver, revolving credit agreement.

Line of credit.

A line of credit, sometimes called a bank line, is the most you can borrow under a revolving credit arrangement with a credit card issuer, bank, or mortgage lender.

When you borrow against a line of credit, you pay interest on the amount of money you actually borrow, not on the available balance, or full amount you are able to borrow.

For example, if you have a $10,000 line of credit on a credit card, you may borrow as much or as little as you want up to that amount, and you pay interest only on the amount you have borrowed.

If you carry a balance of $3,000, you only pay interest on that amount, but there is still $7,000 available for you to borrow. Once you repay the amount you borrow, you can use it again.

A line of credit may be secured with collateral, or unsecured. A line of credit on a credit card is usually unsecured, for example. But if you have a home equity line of credit, your home serves as collateral against the amount you borrow.

line of credit

A revolving loan issued by a financial institution;it may be secured by a mortgage or other collateral, or unsecured.The borrower may draw down the line, up to the maximum limits, at any time and pay interest each month. If the principal is repaid during the time period of the line, then the maximum amount or any lesser amount may be drawn down again.Lines of credit are typically for one year, and then extended from year to year afterward. If a borrower draws down the maximum amount and then does not repay any of the principal,the lender will eventually refuse to renew the note and may require payment in full or conversion to an amortizing loan with regular monthly payments that will eventually pay it in full.Lines of credit are best used by persons with reliable income arriving at sporadic times or by persons awaiting the sale of an asset but needing cash in the meantime.

References in periodicals archive ?
Mark Murphy, Pro-Dex's Chief Executive Officer commented, "We understand Wells Fargo Bank's decision to allow the revolving credit line to expire given the Company's lack of use of that facility for the last several years, and are actively pursuing a new credit relationship.
Hirsch, Chairman of United States Surgical Corporation (NYSE: USS), today announced the completion of a new $400 million unsecured bank revolving credit line running through January 10, 1997.
infoUSA(R) (NASDAQ:IUSA), the leading provider of proprietary business and consumer databases and sales leads, today announced that it has made a $6 million payment on its revolving credit line.
AMEX: LTG) today announced the signing of an amended $50 million revolving credit line with a group of banks including Sun Bank, PNC Bank, and National Canada Finance Corp.
TriNet obtained the three-year $100 million revolving credit line from Nomura in September of 1993.
The revolving credit line, secured by receivables, will be used for working capital and will replace a $10 million revolving credit line from Foothill Capital Corporation.
SUGAR LAND, Texas, March 8 /PRNewswire/ -- Imperial Holly Corporation (AMEX: IHK) announced today a $10,000,000 increase in its revolving credit line to $90,000,000 with the addition to its bank group of the St.
The credit facility, consisting of a $50 million term loan and $30 million revolving credit line, will be used to finance the company's previously reported purchase of the California clinical laboratory operations of Damon Corp.
The revolving credit line is convertible at any time into a four-year, fully amortizing term loan.
5 million revolving credit line which was also with First Interstate Bank of Texas, N.
The agreement increases Arch's revolving credit line by $5 million, to $30 million.