Do you need a line of credit?

A line of credit is a pre-authorized loan with a limit that you can use from time to time, partially or fully.
You repay part or the total and borrow again when needed.

Lenders like Banks, Credit Unions an other Financial institutions like when customers borrow and repay.

If you do not use your temporary loan for a long period, the Bank may cancel it.

The interest that you will pay on your loan is usually matched to the base interest rate fixed by Central Banks plus a percentage depending much on your balance sheet and on the importance of the amount you are accepted for.

Use it wisely.

If you do not use your temporary loan like you are supposed to, Banks or other Financial institutions may recall it.

This type of loan is not for long term financing like other loans that you will repay over a fixed period.
Mortgage or car loans enter in the long term category.

This type of loan is for temporary use.
As an example, let's say you have some investments, are waiting for a payment, you have payments to make, you can then borrow on your temporary loan and make the payment.
When you get paid, you then repay your loan.

Is this type of loan made for you?

It is good to have a temporary loan if you manage it the right way. It will help establish your loan history. And may be useful in case of emergency .
But like credit card , if you are not good at managing your money , you may be better to avoid this type of financing and go for a fixed term loan.

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