Question by : How come on a Personal line of credit loan you get charged an apr and a periodic finance charge? How come on a Personal line of credit loan you get charged an apr and a periodic finance charge? Why not just get a credit card then? I dont get it.. I know credit card rates are high now but most times you can find credit cards with lower rates then my line of credit. someone please tell me the positives of have a line of credit loan... Best answer for How come on a Personal line of credit loan you get charged an apr and a periodic finance charge?:
Answer by rowlfe
A "line of credit" is nothing more than a pre-negotiated, pre-approved loan. It has a maximum value you can draw. You have no charges until you actually USE some or all of the available funds. What you pay for this convenience is that there is no grace period as there is with a credit card and interest accrues immediately. Unlike a credit card, there is no "approval" process needed or required. You write a "check" against the line of credit and it is honored automatically since you are pre-approved. A line of credit is a fallback to other forms of loans. In essence, when someone calls your bank about your "check" they are informed by the bank that your check is equivalent to a certified check with the full backing of the bank behind it. What you are paying for with the interest and such is the convenience, pure and simple.
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Applying for a personal, secured, online loan d could be a nice manner to urge no matter you want. Whether it is that expensive video game system, a car, or a down payment on your first home, you'll obtain the items you would like with little problem if you have one thing of price that you're willing to put up as collateral.
A secured loan is simply one that is saved by your assets. If you own a vehicle or a home, you may put it up as collateral to ensure that a lender can get their money back one way or another. This can be not one thing to try to to without serious thought and while not complete certainty that you can repay the loan, since your lender can be in a position to require possession of your belongings and resell them to recover their cash in the event your loan goes into default. Primarily, you have to supply something of value as security to your lender that they can get their cash back, and interest.
While there's some risk involved with a secured loan, they are much easier to induce approved for than unsecured loans.
When banks and credit unions refuse to figure with folks who could not have fascinating credit histories, they still have the option of applying for a loan online. Personal secured loans can typically be extended to them without the effort of jumping through the hoops of a strict bank, and even for borrowers with great credit histories who could get an unsecured loan, there are reasons they still choose a secured online loan.
Secured loans usually provide a lower interest rate and require little to no down payment that may somewhat be required for a home or automobile loan. Many on-line corporations work with a larger number of lenders and therefore can provide higher deals that could embrace additional than one option for reimbursement schedules.
Many on-line companies also do not place as a lot of emphasis on a credit rating, but examine the value of the property being offered as collateral instead. If they feel there's a guarantee of getting their cash back within the event you are doing not follow through with your payments, then it is highly probably they can extend the loan to you despite whatever your credit report might say.
Applying for a personal, secured, on-line loan is fast and straightforward compared to the paperwork that often goes into applying for a bank loan, and it will be done at any time of day that is convenient to you, since there are not any predetermined hours of operation. You may usually get a quicker reply yet, which could mean you get the cash you wish faster.
If you've got one thing of value that you are willing to place on the road, a secured loan could give you access to the money required to get no matter you would like right now!
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