Line of Credit: Your Flexible Financial Buffer Explained

• A line of credit provides a pre-approved borrowing limit, unlike a traditional loan which gives a lump sum upfront.
• Interest is charged only on the amount withdrawn, not the entire approved limit.
• Ideal for unpredictable expenses like home renovations or managing small business cash flow.
• Offers flexibility: the borrowing limit replenishes as you repay, eliminating new loan applications.
• Caution: Can lead to habitual withdrawals and typically has higher interest rates than secured loans; best for short-term use.