Have easy access to additional funds whenever you need them with a line of credit personal loan.
A line of credit personal loan can give you a convenient way to draw on funds as and when you need to. You can use the funds to consolidate debts, make multiple purchases or just to have in case of an emergency. The flexibility of a line of credit personal loan allows you to withdraw funds up to a pre-determined limit. Interest is only charged on what you owe, not on the entire credit amount.
Find out more about this type of loan and if it's right for you in this guide.
- Access a line of credit
- 5.9% p.a. for up to 3 years (reverts to 19.99% p.a)
100% confidential application
Citi Ready Credit Offer
A flexible line of credit up to $75,000 with flexible repayments. Receive a competitive introductory rate on the initial balance you transfer for three years.
- Interest rate from: 5.90% p.a.
- Interest rate type: Variable
- Application fee: $199
- Minimum loan amount: $5,000
- Maximum loan amount: $75,000
Compare a range of personal line of credit loans
How does a line of credit personal loan work?
A personal line of credit works much like a credit card, giving you a specified credit limit to use how you like. The main difference is the limit is usually higher on a line of credit, while the rates are relatively lower than credit cards. You also won't need to submit a credit application every time you need to make a withdrawal.
Once you're approved, the funds are there for you to use when you need them. You are not charged against your entire balance, only on the funds you withdraw. You can even get line of credit personal loans that are linked to a debit card, giving you more flexibility in how you use the funds.
Line of credit vs personal loan
There are a number of key differences between a line of credit and personal loan that you should consider before making a decision. Generally, a line of credit is more suitable for someone looking for continued access to an amount of funds, whereas a personal loan may suit someone needing to make a large purchase or other expense.
How to compare your line of credit loan options
If you’re considering a line of credit loan, it's important to compare your options and find the loan that’s right for you. Here are some features to keep in mind when considering the products available:
- The interest rate. Not only will you want to compare different interest rates, you will also want to learn how they are calculated. Check that interest is only being applied on the funds you have withdrawn, not on your total balance. Also, keep in mind that in some cases you may have the option of securing the loan against an asset, which should result in a lower interest rate.
- The fees. Compare fees carefully as they are not always set out as clearly as the interest rate. While a personal line of credit may advertise no annual fee, there could be monthly fees or an establishment fee. Make a running list of fees for each brand you are considering and factor that into your loan amount. You can use a personal loan calculator to do this.
- The terms of the loan. You will find that there are two different term types to consider. One is known as a term plan, where you have a certain time frame, which is usually between one and five years, to pay off the principal of the line of credit. The other type of line of credit personal loan will allow you to keep the loan open so long as you continue to make regular monthly repayments. This is also known as a revolving credit and could be ideal if you want a funding source available as a safety net for any unexpected expenses.
- How accessible your funds are. Another thing to consider with this type of loan is how you will access your funds. Again, read these terms carefully. While a bank may offer a card that can be used at ATMs, there could be charges applied for this convenience. You are going to want to weigh the methods of accessing the funds along with any fees associated with them.
Things to consider
- You're only charged for what you use. In most cases you will only be charged interest on the funds you have borrowed, not the total loan amount.
- You can have easy access to your funds. If your account is linked to a card, you are able to draw the funds you need through ATMs and online banking.
- There are flexible terms. You can use the funds how and when you want.
- Fees and charges. Be mindful that fees and charges will likely apply, such as an annual fee, establishment fee or a monthly service fee.
What are the risks?
- Overspending. For individuals with little financial control, access to a large amount of credit may cause them to make unnecessary or otherwise unaffordable purchases.
- Penalties. While the repayments for a line of credit personal loan are generally flexible, you should make sure that you read the terms carefully. Most will expect at least monthly repayments and will charge penalties if that requirement is not satisfied.
How you can apply
You can use the table found on this page to begin comparing your line of credit personal loan options. The eligibility criteria will differ between lenders, so make sure to check this carefully before submitting your application. However, you will generally be asked to provide the following information:
- Income. You will have to show proof of an ongoing steady income. Your payslips are usually acceptable or a bank statement which shows consistent deposits from an employer.
- Liabilities. You are going to be asked to provide a complete list of your current debts.
- Identification. All lenders will need to see a current and valid photo ID of the applicant and in most cases you will be asked to provide a photocopy for their records.
- Assets. Any real property you own, plus cars, savings and investment accounts.