Having an unsecured line of credit is like having a low interest credit card. With it, you can get money whenever you need without having to reapply.
The best part of an unsecured line of credit is that it does not require you to put up collateral to get the loan. However, you do need a good credit history in order to qualify for an unsecured credit line. You will never be granted an unsecured credit line if your credit score is poor, because the lender is taking a greater risk if you default.
Upon approval for an unsecured credit line you will often receive checks that will allow you to draw on the line of credit whenever you need to. Unsecured lines of credit give you an uninterrupted cash flow whenever you need it. Therefore, it is an excellent option when you are not quite sure how much money you might need for your on-going projects such as home renovation, car repairs, or education.
An unsecured line of credit is typically a revolving credit line where you use what you need. Then, like with any other credit line, you are charged interest every time you borrow money and if you default, interest and penalties will accrue. Interest rates are quite competitive with most unsecured credit lines.
Last Updated on: Tue, 8 Aug 2017