Line Of Credit Loans

Lines of credit are similar to having a big chequebook, but with interest accruing on the balance. A line of credit, or equity line as they’re sometimes called, is an approved limit of borrowings that you can use part of it or all at once.

For example, you have a line of credit for $400,000. This means that you can use up to a total of $400,000 all at once or perhaps invest $100,000 in the share market. If you did the latter, you would only pay interest on $100,000 as the remaining $300,000 would be untouched.

If you were to use a further $140,000 for house renovations, for example, then you would be paying interest calculated on $240,000 ($100,000 for shares + $140,000 for investment) leaving $160,000 to use at a later date if required.