The catch is you’ll need collateral. Track where you’ve spent your money and create a repayment plan to ensure you’re not stuck paying large interest amounts when the draw period ends. When you apply for a line of credit, having better credit scores could help you qualify for a lower annual percentage rate. We may receive payment from our affiliates for featured placement of their products or services. To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. If you’re not able to, you might want to look into business lines of credit instead. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what weâre scoring on a given page. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Your payment history makes up 35% of your credit score, and delinquent debts remain on your report for seven years. It depends on how you use it. Because of this, lenders rely heavily on your credit score. The Simple Dollar is an independent, advertising-supported publisher and comparison service. KeyBank’s personal lines of credit don’t require collateral and offer the benefit of flexible payment options, but low upper limits make them a less-than-optimal choice for many borrowers. These open-end credit products provide financial flexibility in the form of on-demand funds and are commonly used to cover unexpected expenses. Learn how we maintain accuracy on our site. But interest rates tend to be variable, which can make it difficult to predict your monthly repayments. While every lender differs, expect the application process to include questions about your current financial health, credit rating, assets and income. Features and drawbacks to consider before you invest through Yieldstreet. Interest rates: In most cases, personal lines of credit come with variable interest rates. Citibank is all about options â borrowers can access anywhere from $1,500 to $25,000 credit lines and can skip the yearly fee if they make at least one payment each year. Since personal lines of credit arenât secured by an asset like your car or a house, your credit is backed by your promise to repay the lender. Â© 2020 TheSimpleDollar.com a Red Ventures Company, Bank of America Personal Loans Alternatives. The caveat? The concept of credit lines is simple: When you’re approved for a line of credit, you have access to any or all of the loaned balance. 580 or 600 depending on state of residence. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. We may receive compensation from our partners for placement of their products or services. Make sure your credit score is solid before starting the application process. View our full advertiser disclosure to learn more. The right personal line of credit can help you complete large projects or make large purchases without the rigidity of personal loans or the big interest rates of credit cards. . Call 1-800-769-2511 to apply for a line of credit or personal loan. There is one major difference: Personal loans offer borrowers a single lump sum and, generally, a fixed interest rate over a set loan term. Secured lines of credit are backed by collateral, such as your house or a savings account. Failing to make a payment could have long-term consequences. We awarded higher scores to lenders with more generous loan sizes. Though not all banks offer them, you wonât have trouble finding one that does. [ Read: Pros and Cons of Taking Out a Personal Loan ]. While traditional personal loans have a fixed term, a line of credit lets you access extra money whenever you want (up to your credit limit). That means if you qualify for a high limit, you won’t pay interest on the full amount unless you draw it in full. Technically, yes — but it will be harder to qualify for the best rates. SunTrust has two lines of credit, but only its Select Credit Line is secured. Need a personal line of credit? Secured credit offerings, meanwhile, often have lower rating requirements but require collateral. Understanding how a line of credit works and comparing these main features can help you find the best one for your needs. Each draw is considered a loan — which means your APR will vary every time you borrow as your debt-to-income ratio, credit score and income change. SunTrust credit lines are light on fees and big on limits; just make sure you don’t get burned by shorter terms. Personal lines of credit are a revolving credit, which prevents them from being offered by many online lenders. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence. Built-in overdraft protection can help KeyBank customers rest easier knowing they won’t face additional fees if the balance goes too low. You might find yourself opening the line of credit for a specific reason, such as debt consolidation or home improvements. The Simple Dollar has partnerships with issuers including, but not limited to, American Express, Capital One, Chase & Discover. We looked at the maximum APR for each lender â the lower their maximum rate, the higher their score. You may also be able to get a better deal through a bank you have a long history with. If youâre a member of a credit union (or can become a member) this might be a good option to consider. But they can come with a fixed interest rate. The downside of this choice is that thereâs no bank location to visit if you want to talk to someone in person. In an emergency when funds are tight from being unable to work, that extra protection can save you from facing overdraft fees. A personal line of credit is another financing option you can use for almost any purpose. A line of credit will typically cost you a bit more in the way of interest than a personal loan would, at least if it's unsecured. You’ll also receive a free FICO credit score statement every month to help you keep your finances on track. It’s open to borrowers with fair credit, though it likely isn’t the best idea if you’re consolidating your debt, since APRs can reach as high as 29.99%. SunTrust offers the largest personal credit line limit on our list. 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