Companies have been using credit lines for decades in order to bridge the gaps in their cash flow or meet the demands of growing business. More recently, personal credit lines have become available as an option for individuals to access cash on demand.
A credit line is an ongoing form of credit which you can use to borrow money as and when you need it. You apply for a credit limit and, if approved, you can transfer funds into your nominated bank account. You will need to make monthly repayments towards your balance but our repayments are flexible to help fit your needs and your budget - pay the minimum repayment amount one month, repay more next month or repay your full balance at any time that you want. As long as you comply with the terms of your credit agreement, you can continue to make further transfers of any amount of £25 or more and up to your credit limit at any time. The ease of access and the flexibility of repayments can make a credit line an excellent choice. Find out more about credit lines here.
Credit lines, like any other financial product, need to be used responsibly. Borrowing from a credit line can effectively solve month-to-month cash shortfalls, however, missed payments and overcommitment may result in financial difficulty.
If you are not sure whether a credit line is the most appropriate choice for your circumstances, there are some other options you may wish to consider.
If you have clear the funds in your bank account, your bank may offer you the option of credit by giving you an overdraft. Arranged overdrafts are set up in advance and give you the option of using extra money, up to a fixed amount, however unarranged overdrafts may result in significant charges. In comparison, a credit line may offer more flexible and cheaper repayments.
A credit card is a card, issued by a lending institution, which allows customers to make purchases that can be paid for in the future. They are convenient and flexible to use on an ongoing basis, however, if you don’t repay on time, you may face late payment fees as well as the interest that accrues on your credit card balance. Additionally, to receive a credit card you may need to complete a lengthy application process and wait for your card to arrive in the post. In contrast, our lending decision is made in minutes.
A small loan, lent at a high interest rate, under the agreement that it will be repaid over a short period of time, usually when the customer is next paid. Payday loans may be more suitable for occasional use, whereas credit lines offer a revolving credit facility and usually offer lower interest charges and more flexible repayment options than payday loans.
A guarantor loan requires another person to act as a guarantor and be a party to the credit agreement. You will need a guarantor with a good credit history to secure a loan, as opposed to credit lines where you rely on your own credit status only and there are options available for customers with a less than perfect credit history.
Find out more about borrowing with a poor credit score here. (Link to A5 “What are my options if I have a bad credit history?”)
When borrowing from friends and family you may benefit from more flexible repayment options and no interest rate on the loan, however talking about financial issues is often a difficult and private subject. A credit line may be a suitable alternative, often offering lower interest fees than payday loans and flexible repayment options while maintaining privacy about your financial situation.
We created Polar Credit to provide you with access to credit in a fast, easy and transparent way. Polar Credit is a revolving credit facility that can help with your monthly expenditure. If you are approved, an account with us lets you withdraw funds when you need to, with cash transferred to your bank account within minutes of approval.
We know what matters to customers when they are looking for credit – a simple online application form, a quick decision and fast access to cash. Our credit line brings all of this together, in a product that also comes with a much lower interest rate when compared to payday loans. Find out more here.