Why Should You Manage Your Expenses With A Line Of Credit?

Are you facing unplanned expenses and wondering how to meet them? Are you considering a personal loan but wished it brought you more flexibility? It is perhaps a good idea to consider a line of credit. As a credit facility customized for you, a line of credit allows you the freedom to use a portion of the loan as you want and when you want it.

What is a Line of Credit?

A line of credit gives you a specified amount of credit for a chosen tenor. You can then withdraw as much as you need currently and pay interest only on the amount used rather than the whole amount unlike in a usual loan offering. You can then withdraw more when you need it without the need to notify your lender. You also have the right to pre-pay a portion of the loan when you have the excess funds and re-avail the prepaid amount in case the need arises.

Apart from the flexibility this offers, it also gives you a convenient way to repay - charging you only the interest component in your EMIs. You can pay off the principal at the end of the tenor.

If you have a good credit rating and fit the Personal Loan Eligibility criteria, you can make use of a line of credit facility at low interest rates. If you have already taken a line of credit and want to turn it into a personal term loan, you have the full flexibility to do that too!

Let's find out more about this facility and the benefits it brings to you when it comes to personal finances.

How Does A Line Of Credit Help You Manage Your Expenses?

Since this facility is extremely flexible and allows you to withdraw as many times as needed as long as it is within the credit line extended to you, it is the ideal source of finance for unplanned personal expenses or for your urgent needs. Here are some features of the line of credit that can help you manage your expenses:

• Lets you withdraw money based on your needs: We can't always pinpoint personal expenses down to every penny, and sometimes you may need money for an unforeseen emergency. In such cases, a line of credit lets you raise cash for your unplanned expenses without needing you to pay interest on the unused amount. Thus, you save money while having the security of being able to use finances when you need them. Secondly, there is no restriction on your use of a personal line of credit; you may use it for daily expenses, to finance a wedding, to buy an asset like a car, to fund your child's higher education, for renovating a house, etc.
• Lower EMIs: Since the EMI component of the loan consists of just interest, your monthly EMIs can be as much as 45%* lower.
• It has no exclusive application procedure: Once you fit the eligibility criteria of a personal loan, you can easily and instantly apply for this facility. You do not have to go through any lengthy paperwork and application formalities for it. All you have to do is call up your lender and request for a line of credit. It's as easy as that!
• No restrictions over part-prepayment: You can easily part-prepay to reduce your EMIs when you have excess funds. And there are no limits on how many times you make part-prepayments. There are also no prepayment charges or penalties applicable. This makes clearing the principle amount much easier and hassle-free for you.
• Attractive interest rates: Just like other loans, the line of credit too is subject to interest rates. However, the interest rates on this facility affordable, which makes borrowing it light on your pocket.
• No security or collateral: This facility is unsecured and does not require you to submit any collateral in form of valuable assets. Thus, you need not worry about the hassle of attaching property or any other asset as collateral towards this facility.
• Online prepayment and withdrawal facility: This option does not require you to go through lengthy manual payment procedures like submission of a cheque. You can conveniently prepay your loan amount online via the customer portal and withdraw as much as you want online too.
• It has no additional charges for withdrawal: This facility does not require you to pay any additional charges over the withdrawal of the loan amounts like processing fees and other charges. This makes line of credit very affordable.

Pay off all your personal expenses conveniently with a Line of Credit. For instance, Bajaj Finserv, one of India's most diversified non-banking finance companies (NBFC), offers a Line of Credit, where you can ask for a credit line of Rs.80,000 to Rs.15 lakh with a minimum tenor of 1 year. You can see all the features of Personal line of credit online.

*Terms and conditions apply.