
Is a Line of Credit Right for Me?
July 18, 2025
By Sarah Sumner
Is a Line of Credit Right for Me?
Personal loans can cause personal dilemmas when trying to determine the right choice for you.
Deciding to apply for a personal loan can be tough. There are so many options available, it can make your head spin! You might be wondering, "What is a Line of Credit, and is it right for me?" To help you answer those questions and more, we've compiled information about Lines of Credit to assist you on your loan journey.
What is a Line of Credit?
A Line of Credit is a flexible way to borrow money. Once you are approved, the lender gives you a set credit limit and you can borrow as much or as little from that credit limit as you please. A Line of Credit is an open-ended loan, meaning there is no set maturity date and the loan remains open as long as you need it. You can continue to borrow from your credit line without having to reapply for a new loan, up to your credit limit. Typically, with a Line of Credit, you make payments that include what you borrowed plus daily interest applied to the principal balance. As you make your payments, your credit line is increased to reflect what you paid down on the principal balance.
How do I know if a Line of Credit is right for me?
Do I want a flexible loan?
If you're looking for a loan that gives you flexibility, then a Line of Credit could be what you're looking for. There is no set maturity date; you can typically take out as much or as little of your credit limit as you'd like and you only pay for the time you use the funds.
Do I need ongoing access to money?
You may not need an open-ended loan and that's okay. You don't have to keep your Line of Credit open for longer than you'd like. If you carry a zero balance, generally you will be able to close the loan with no problems. Many lenders may give you the option to keep your credit line open with a zero balance, just in case you need to access more funds in the future.
Is the interest rate something I'm comfortable with?
To find out, you should weigh all your options by getting the rates and terms of each loan you're considering and determine what payments with interest will look like depending on how much you draw on the Line of Credit. If you get as much money as you think you'll need without having to pay higher interest, that loan could be a good choice for you.
Are you Team Line of Credit?
If you said “yes” to any of these questions, a Line of Credit may be a worthy loan option for you. They're flexible and can easily meet your ever-changing needs. Deciding on a personal loan can be hard because there are so many different options to consider. So, do your research, remember to ask questions, and stick with a trusted lender.