Can I use a line of credit for multiple purposes?

Yes. A line of credit can be used for a variety of personal expenses, including home renovations, unexpected bills, or managing cash flow. Because you can draw down funds as needed, it's flexible enough to suit different financial goals.

How does a line of credit affect my credit score?

When you apply for a line of credit, the lender will perform a credit check, which can temporarily affect your score. Ongoing use, such as maintaining a high balance or missing repayments, may also impact your credit rating over time. Responsible use, however, can help demonstrate positive credit behaviour.

What's the difference between a line of credit and a credit card?

Both let you access funds on an ongoing basis, but a line of credit usually offers lower interest rates and higher borrowing limits. Credit cards are better for everyday purchases, while lines of credit are often used for larger or irregular expenses.

Can I make extra repayments on a line of credit?

Most lines of credit allow you to pay more than the minimum required amount, helping you reduce interest and pay off your debt sooner. Check with your lender to confirm if there are any restrictions on additional repayments.

Is a line of credit better than a personal loan?

It depends on your needs. A personal loan provides a lump sum with fixed repayments, while a line of credit offers ongoing access to funds. If you need flexibility, a line of credit may suit you better; if you want predictable payments, a personal loan might be simpler.

Can I increase my credit limit later?

Some lenders allow limit increases if your financial situation improves or you have a good repayment history. You may need to submit an updated application or provide new financial information.

Are there any set-up or ongoing fees for a line of credit?

Yes. You might be charged an application fee, an establishment fee, or an annual service fee depending on the lender. It's important to check the full fee schedule before applying to understand the total cost of your credit line.

Is a secured or unsecured line of credit better?

A secured line of credit, often backed by your home equity, usually offers lower interest rates but puts your asset at risk if you can't repay. An unsecured line of credit doesn't require collateral but may come with higher rates and smaller limits.

Can I close my line of credit account at any time?

You can generally close your account once the balance has been paid in full and any applicable fees have been cleared. Contact your lender to confirm if there are any specific steps or closure requirements.