line of credit

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Related to Revolving Loan: Revolving Loan Fund

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 ?
They further added that the NREA seeks to ease procedures of establishing solar power plants through the revolving loan with an interest rate of not more than 6% for house and commercial uses.
com) is a national developer of nonprofit accounting and financial management/reporting software, and revolving loan servicing software for contract, grant and activity recipients.
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The revolving loan fund has the potential to help local farmers meet their infrastructure needs, diversify products, increase environmental practices, fill gaps in the local food supply and create new markets," said Co-op General Manager Jim Ashby.
3 million in revolving loan funds grants from the EPA.
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Bloomberg, New York City Housing Development Corporation (HDC) President Emily Youssouf and Banc of America Securities' Phil Smith announced a low cost, innovative venture to increase the construction of affordable cooperative developments as a result of a Bank of America revolving loan fund of $100 million and loan financing provided by HDC.
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As part of its Brownfields Cleanup Revolving Loan Fund Pilot Program, the U.
Eighty-five per cent of the Mohawks of the Bay of Quinte's homes are privately owned, because of the 2,200-member band's revolving loan program that offers low interest rates for complete mortgage terms.
This growth is due in large part to technical assistance grants and a $15 million revolving loan fund established by Congress and administered by the National Credit Union Administration, the federal agency that oversees and insures the nearly 12,000 credit unions nationwide.
Proceeds from the revolving loan may be used to fund Stratus' working capital needs, including land acquisitions; however, without prior approval from Comerica, individual land acquisitions shall not exceed $3.