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Line of credit

A line of credit is a prearranged loan usually issued by a bank.

Expanded Definition

Once approved, the borrowed funds can be accessed by check, by overdraft, or sometimes by debit card. The funds are loaned as needed with interest charged on the borrowed amount, usually at the end of each month. Some lines of credit are backed by pledged real estate or some may be personal loans, backed by your promise to pay from current cash flow.

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