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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The company added East West Bank is now a 50% participant in its parent level revolving credit line.
The new credit facility, which could be expanded by USD50m, includes a senior secured revolving credit line of USD200m and a senior secured term loan of USD100m.
The report stated that the company is in discussion with banks for a revolving credit line worth USD5bn.
The facility includes a fully committed revolving credit line of USD30m, consisting of USD15m of available credit immediately upon signing, and an additional USD15m at the earlier of completion of syndication or 90 days.
The company said that it had USD1.91bn of cash as of 31 March 2005, plus an available USD575m unsecured revolving credit line.
Coal company Westmoreland Coal Company (NYSE:WLB) disclosed on Wednesday the modification of certain terms of its revolving credit line under its regular business update with its banking partners.
25 July 2012 - Wells Fargo Bank National Association has extended a USD50m (EUR41m) revolving credit line to Business Development Corporation of America (BDCA), the US investment fund said Tuesday.
The credit agreement consists of an USD40m revolving credit line and an USD5m term loan.
In addition, the company as of 12 April increased its USD 45m revolving credit line with KeyBank National Association to approximately USD 67.2m of which USD 60.35m will be used to fund the purchase of the fourteen assets.
The asset manager said in the filing it would use the proceeds from the revolving credit line for working capital and general corporate purposes.
Proceeds of the facility are being used to replace First Majestic's USD15m revolving credit line it assumed when it acquired SilverCrest Mines.