line of credit

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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 ?
* Can Oxfordshire LOC develop a more open and inclusive relationship with its members--improving commitment to the LOC's vision through shared knowledge and dialogue?
The Minor Eye Conditions Service, which is operated through an LOC company, is exceeding all expectations.
"LOCSU is here to help--from providing expertise and support in establishing LOC companies to completing the AQP application process and accessing the necessary software to underpin the bid," said Mr.
The committee now has excellent links with local decision-makers, who feel confident enough to deal with the LOC directly, so much so, that the deputy director of the PCT has attended LOC meetings and worked to produce new services with service level agreements.
Alternatively, every LOC has a website where you will find the contact details for someone on the committee who you can email to introduce yourself.
The microfluidic technology that is at the base of the LOC has its genesis in space; it's a by-product of NASA's and DARPA's investments in micro-lithography in the 1960s--for making what became computer chips--and in the development of MEMS in the 1990s.
If an appropriate LOC pattern is prepared to conduct various portions of RT-PCR, then the same optical detection components can be implemented around the LOC to quantify the fluorescent signals during thermocycling (of RT-PCR).
California self-insurers have figured out how, for publicly traded companies, to substitute another form of collateral, which is less than one-fifth the cost of an LOC.
When the application is approved by the bank, it issues the LOC. The databases can then be used to create statistical reports, and can also handle outgoing direct collections.
Delegates at the conference (10-11 November, Hilton Birmingham Metropole NEC), will be given updates on how the LOC Support Unit (LOCSU) has expanded its commissioning team and is helping LOCs deliver the new minor eye conditions service (MECS) and step-down care "to propel the sector forward."
Los Angeles World Airports ( Lawa Or The Department), Is Requesting Banks To Submit Proposals To Provide One Or More Direct Pay Letters Of Credit ( Locs) Totaling $150 Million To Support Its Existing Commercial Paper Program (the Cp Program) For Los Angeles International Airport ( Lax).