Credit line for individuals

The growth of consumer lending in Europe is clear proof that society needs new safe and ethical financing channels. In this context, online credit lines for individuals are born.

A credit line is a product that allows us to access a certain amount of money for a certain period of time through a bank account or credit card. Unlike other financial products, the client does not receive the total amount approved by the financial institution, the amount is paid in installments depending on the needs at each moment. In addition, you will only pay interest on the amount that you have finally received.

In fact, credit lines are intended for both companies and individuals or the self-employed, the only difference is the total amount provided based on the applicant's financial profile. Its operation is very similar to the operation of a credit card, in which the bank provides you with a sum of money for a certain period of time (which is usually one year), and you can use it in full or only part as needed.

Characteristics of credit lines

-The financial institution approves the maximum amount within a certain period of time.
-The borrower can get the desired amount depending on his needs, without exceeding the maximum amount.
-In addition, you will pay interest only for the part that you borrowed, regardless of the total credit line.
-Usually a commission is charged for opening and maintenance.
-In the case of credit line agreements between individuals or with crowdlanding, an agreement may be reached under which no interest or commission is paid.
-After the completion of the contract, it can be extended by the same or a larger amount, provided that the applicant's financial profile remains stable.

The difference between a credit line and a loan for individuals

Although the goal is the same - to offer financing to a user who does not have sufficient liquidity at that time, loans for individuals work differently than credit lines. Let's look at the main differences:

-The total amount agreed upon from the first moment is transferred in the loan agreement. On the other hand, only the required amount up to the maximum amount provided is available in the credit line at any time.
-As for the interest, while they are paid with a loan from the moment the capital is received for the total amount, with a credit line they will be paid only for the amount used, even if you cannot use the credit line, interest will not be paid.
-Although the credit line can be consistently extended after its expiration, the loan must be repaid within the period stipulated in the contract.
-Finally, a line of credit is usually used to cover specific expenses in relatively short periods of time. On the contrary, a loan is usually granted for large long-term investments or for the acquisition of valuable assets (such as buying a car or a house).

Advantages of credit lines

Credit lines have become a stellar product for those who have a fixed income and are looking for a reliable and flexible method of financing for individuals. Among its main advantages are the following:

-Speed: you can get the right amount exactly when you need it, since the money is in the account in your name.
-Convenience: you will pay interest only on the amount used. In addition, as soon as you return the money to the account, you will be able to use the entire amount again as many times as you want.
-Security: in case of unforeseen circumstances or in case of the need for prepayment of bills, the credit line allows you to have this money so that you are not at risk of leaving your current account in the red with the subsequent payment of burdensome interest.

Why choose microcredit online instead of a credit line?

A credit line is a convenient and secure financial solution in the face of recurring liquidity shortages. However, this financial product is not the most suitable when we need one-time assistance to cover unforeseen or specific expenses. In these cases, it is preferable to request a quick online loan.

Online micro-loans have conditions very similar to the conditions of credit lines. Regardless of the approved amount, you can withdraw only what you need and pay the appropriate interest. From the first moment you will know how much you need to pay, and if a particularly difficult month comes, you can request a delay. If you repay the loan before the end of the allotted period, you will again have the full amount at your disposal in case you need it again at any time. At the same time, it is not necessary that you have a salary or pension, you will just need to show that you receive regular income every month. Since all services comply with the principles of European responsible lending, you will never be offered an amount that you cannot comfortably afford.