Saturday, September 30, 2017

Why a Personal Line of Credit is Better than a Personal Term Loan




Puzzled between a personal Line of Credit and a personal term loan and which is better? Look no further, go ahead and explore more on this as you read on!

Confused between a personal Line of Credit and a personal term loan? You are not alone; many borrowers face such a situation sometimes while deciding a financial product feature. Let’s clear the air.

  • A Line of Credit makes it uncomplicated for you to manage your cash flow better and clear the air to find out why it is better than an average term loan. 
  • A personal loan may be your best option when it comes to optimizing the output of your personal needs or ventures. 
  • It offers a low-interest rate so that you manage the finances even more, without the alarming worry of repayment of the loan amount at an exorbitant interest rate. 
  • A personal loan subscriber is free to select from an array of flexible repayment alternatives and opt for the one that fulfils the current financial needs. 
  • A personal loan is an unsecured loan and does not need any security or collateral or even a guarantor when you apply for it. 

What’s more, it also comes loaded with a variety of add-ons offers to augment the borrower’s experience such as hassle-free and easy-to-use personal loan EMI calculator and online account access. 





But, the best feature of a personal loan is the unique Line of Credit facility that not only provides the personal loan term benefits but also comes with an assortment of extra features that makes it perfect for an individual.



Under Which Scenarios Should You Opt for a Line of Credit


  • Renovating Your Home
  • A Family Vacation 
  • Child’s Education 
  • Wedding Ceremony 
You can use Line of Credit facility for renovating your home, planning a family vacation, funding your child’s education and an upcoming wedding Ceremony and more– and for doing this; you don’t need to apply for a loan many times.

There are also no hidden or extra charges for part-prepayment or foreclosure.


Why Should You Select a Personal Line of Credit Over a Term Loan?


If you wish to get a personal loan from a reputed financial lender, you get the chance to avail a Line of Credit facility as well. 

Many leading financial companies provide the facility to its loan claimants, through which you also become eligible for a fixed loan limit for a pre-determined tenure.
As a result, when you avail the Line of Credit facility, your EMI only includes the interest amount you need to pay, minus the principal component, attached to all payments in the case of the personal term loans. 

With a Line of Credit facility in action, you only repay the principal loan amount at the end of the duration. The personal Line of Credit (LOC) option also lets you manage your cash flows without the need to repay the principal part at the each month-end; you can also channel the same amount towards other personal needs and boost your profits.


The Extraordinary Features of a Personal Line of Credit


Here’s the list of impending reasons why a Line of Credit is a go-to option when considering a new loan:

  • When compared to any other term loan type, your monthly instalment or the EMI (Equated Monthly Statement) via the Line of Credit facility connects only the interest amount charged for that particular month
  • You can carry out any transactions and it is also possible to access all the loan based information online with an exclusive customer portal at your disposal always 
  • Part-prepay of your loan amount on mind? You can do this anytime you want, throughout the year, without the worries of incurring any add-on charges whatsoever 
  • You can also opt for withdrawals or draw down facilities without facing any extra charges whatsoever 
  • With the bullet repayment option in active mode, you can pay off your loan faster at the end of the year
  • If you are already in possession of the term loan and wish to convert to a Line of Credit (LOC), you have the choice to do it at any time and as per your wish
  • You can also measure the total exact interest that you will pay at each month-end with the Line of Credit calculator 

The Bottom Line


You can pay up to 45% lower EMIs on your term loan when you avail the personal Line of Credit facility which many prominent financial lenders offer these days.

You should know that a Line of Credit is a hassle-free version of a personal loan, in which you also get a pre-qualified loan amount. You can withdraw as per your needs and repay only the interest as EMIs; making it an incredible facility that sets you free.

You can use it for anything under the sun – planning a family holiday, renovating the home, upcoming wedding ceremony, funding child’s education and beyond – without having to subscribe many times.

The other perks? You also pay no extra or hidden charges for loan’s part pre-payment or foreclosure.

It would be a wise step to take and apply for a personal Line of Credit with your term loan. Happy financing! 


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