Tackle Goals with A Line of Credit
Goal Getting in the New Year
Meeting goals in the New Year can feel daunting, particularly if those goals require a financial investment. Paying off debt, getting financially fit, implementing a personal budget, and working towards checking larger items off the never-ending to do list are all great targets. But what happens when the goals feel a little too big to tackle? Reality sets in each year for many people: there just never seems to be enough time or money to get things done.
Don’t stress too much, though. Your friends at Speedy Cash have your back. In fact, we’ve had your back since 1997! A long-term friendship like this one comes with a few benefits, right? Right. One of those benefits is multiple, options for obtaining needed funds. We have multiple types of loans including a Line of Credit.
What is a Line of Credit?
A Line of Credit is a unique form of lending designed to provide access to funds a little at a time (or all at once depending on your situation) to help you leap the financial hurdles that may have popped up for you. A Line of Credit is designed to offer the flexibility of withdrawing funds as you need them.5
What makes a Line of Credit so unique?
There are various advantages to a Line of Credit. Consider the following points when weighing your options and the benefits of a Line of Credit:
You receive a credit limit but only borrow what you need, and not a penny more
When compared with a personal installment loan, for example, a Line of Credit is preferred by some borrowers when the exact amount needed to cover the costs at hand is unknown. For instance, some of our customers use our loans for expenses like home or auto repairs or medical bills. When facing these types of costs, it may be complicated to pinpoint the exact amount of money that will be needed to see the situation through to the end. A Line of Credit offers an approved amount, and the borrower can take out the funds a little at a time up to the limit. However, if less money is needed, borrowers are not required to draw or use the entire loan amount.
So why is that important?
Simply put, you don’t have to borrow the entire approved personal credit line amount at one time, you have the flexibility to choose how much to borrow up front with the option to borrow more later from your available credit line.
Interest is accrued based on borrowing, not the entire credit limit
Interest only accrues on the amount borrowed,3 you will have a minimum payment amount that includes a state required reduction in principal plus interest due each month. Paying more than the minimum payment not only helps you reduce the debt faster, but also frees up available credit if you need it in the future. If you choose a Line of Credit vs a traditional loan such as an installment loan, you will be in the driver’s seat regarding the amount you borrow and the interest you will pay. With a traditional personal loan, if you borrow $5,000 you will pay interest on $5,000 even if you do not use the full amount of the loan. If instead you choose a Line of Credit, using the same number as an example, you could be approved for $5,000 but only use $3,000 due to a project coming in under budget. In this example, you pay interest on $3,000 (the amount you borrowed) instead of the $5,000 you were approved for after applying.
So why is that important?
When facing large projects such as a home renovation or car repair, costs can fluctuate.2 When you are unsure of how much you will need to complete a project, a Line of Credit might be the right option for your situation. Unlike an installment loan, you do not have to choose the amount you will borrow up front. You’ll only pay interest on the amount you draw, or borrow, which offers additional flexibility.
You can continue borrowing without a new application
You can apply quickly and easily through Speedy Cash and once you’re approved, you’ll receive a lending limit for your line of credit. As you pay back the loan you can continue borrowing up to the credit limit you were approved for originally. Credit is available to you again (up to the original approval amount) without needing to reapply. Because of this flexibility,4 a line of credit can be especially helpful when working through repairs because sometimes costs go up depending on the extent of the required repair after the work is started. If you call in a plumber to fix a leaky drain and quickly discover there’s an issue with the drain line and perhaps even the main line that is buried in your yard, the costs can quickly add up.
So why is this important?
Unfortunately, it is often impossible to foresee the scope of a major project or repair until you’re knee-deep in expenses. In these situations, a Line of Credit may be advantageous. A Line of Credit offers the freedom to tackle a large goal that may create ongoing expenses without the hassle of multiple loans to keep up with and multiple applications or waiting periods.
You decide how to spend your cash
Have multiple projects rolling at once? No problem. You’re in the driver’s seat. One of the greatest advantages of working with Speedy Cash to obtain one of our lending products, is that you can choose how you spend your funds. You can direct the funds to multiple areas of need as well. As they say, sometimes when it rains it pours which means multiple expenses that you didn’t budget for may arise at the same time. A Line of Credit, or any of the Speedy Cash loans for that matter, may offer enough to cover everything on your list with one conveniently accessible loan.
So why is this important?
Whether you’re covering an emergency, handling a large project, paying a repair person to handle a rainy-day project or just simply purchasing items that you need, the choice is yours!
Before You Borrow
When applying for loan type from a lender, responsible borrowing should be top of mind. Plan ahead for repayment, and always consider how much you can reasonably afford to pay back5 once payments are due. It’s important to do your own research prior to applying for any type of personal loan, and to weigh all the pros and cons1 of each lending product.
Speedy Cash offers insight into the way a Line of Credit works on our Line of Credit FAQ page. Our dedicated team of experts are always available to answer your questions, and to help you assess your situation so you choose the loan type that is right for you. If you’re facing an expense that could prove ongoing, the benefits of a Line of Credit may be the right fit for your situation, but you should always do your research prior to making a borrowing decision.
Speedy Cash will always have your back, and we work hard to provide excellent options for our customers. If a Line of Credit sounds like the right fit for your situation, reach out to get the ball rolling.
1Kiah Treece & Jordan Tarver (2021, May 29).Pros and Cons of Personal Loans Retrieved from: https://www.forbes.com/advisor/personal-loans/pros-and-cons-of-personal-loans/
2Millerbend, Annie (2022, January 7).What is a Line of Credit? Retrieved from: https://www.nerdwallet.com/article/loans/personal-loans/personal-line-credit
3Consumer Financial Protection Bureau (2022, February 22).What is a Personal Line of Credit? Retrieved from: https://www.consumerfinance.gov/ask-cfpb/what-is-a-personal-line-of-credit-en-901/
4Hayes, Adam (2022, June 19).Line of Credit (LOC) Definition, Types, and Examples Retrieved from: https://www.investopedia.com/terms/l/lineofcredit.asp
5Suknanan, Jasmin (2022, December 20).Personal loan vs personal line of credit: What’s the difference? Retrieved from: https://www.cnbc.com/select/personal-loan-vs-personal-line-of-credit-difference/