Personal Line of Credit

 A personal line of credit is an account that you can turn to when you need extra funds. You don’t have to borrow from your line of credit, but it’s available if and when you need it. From paying bills to a medical emergency, you can use the money for almost any personal use. Your personal line of credit account will have a credit limit, which is the maximum amount you can borrow at once. But you can also borrow less than the credit limit if you choose. 

  Open-end credit is not restricted to a specific use or duration, in most cases. A personal revolving line of credit is a type of open-end credit. Closed-end credit includes debt instruments that are for a particular purpose and a set amount of time. 

Pros:

• Borrower flexibility: An online line of credit doesn’t have to be used at a particular time; rather, it can be a backup option for extra funds.
• Peace of mind about unexpected expenses: If you must immediately pay for a car repair or another large purchase, your credit line is there to quickly get you the funds you need.
• Ongoing access to credit: A personal line of credit allows you to borrow as much as you want up to the maximum credit limit. When you pay it back on time, that amount is available for you to borrow again.

Cons:

• May cost more than secured debt: While some lines of credit are secured, like a home equity line of credit (HELOC), an unsecured credit line can have a higher interest rate or fees than secured debt.
• Potential for variable rates and/or fees: If you apply for a personal line of credit with a variable interest rate, be aware that it can change over time — and potentially make your minimum payment different than expected. Cigna has two fees: a Cash Advance fee of 3% for each Cash Advance you request and a Carried Balance fee ranging from $3-$50 for each month you carry a balance of more than $10. There’s no variable interest rate to worry about.
• Must meet requirements: Every lender has specific standards for issuing a line of credit — for example, credit history considerations.