Personal Line of Credit

A personal line of credit is like a credit card -- you can use it as much as you like, or use it when you need. You only pay interest on the funds you use. 

Your monthly payment varies with how much funds you use, and your interest rate is variable, too. You'll have a limit on how much funds you can use. The period of time you can use the funds for is called the draw period. 

By contrast, a personal loan means you get a lump sum of cash and you pay it back in equal amounts every month over the loan term. You agree to a fixed interest rate, which is part of your monthly payment.

You can use your personal line of credit for anything you like! You can use the funds to pay for a specific purpose you have in mind, or to meet unforeseen expenses like car repairs and health care bills.

You can also use your line of credit as an emergency fund or to consolidate debt.

Yes, making monthly payments on your line of credit is a good way to build credit. Just be sure to pay at least your minimum amount due on time every month.

You'll pay interest on the balance of your account at the end of the billing cycle each month. If you have no balance because you didn't use any funds yet -- or you paid it all off -- you won't be charged any interest.

Your APR will be based on factors such as your credit score, and will fluctuate slightly with the market rates.