What is a Line of Credit?

Line of Credit Application

Julie needs to pay her electricity bill that’s due this Friday. She doesn’t have the funds in her bank account but knows she will have them next Friday when she gets paid. In the meantime, Julie needs to pay her bill before her electricity turns off.

Dana, Julie’s friend, tells her to check into a line of credit. Dana says she applied for a line of credit when her mother passed and she had to pay for the funeral. She says it was a great option because she was able to keep it open even after she paid it off. The funds are always available if needed.

Julie decides to check into a line of credit with Advance Financial. She walks into the store where Henry is there to greet her with his “happy to help” paddle and a smile. He informs her that she can get approved for a line of credit as soon as today.* He walks Julie through the quick and easy application process and is able to get her the cash she needs today. Julie has a $4000 credit limit, meaning she has $4000 cash available. Julie decides to take out $400 for the time being. Henry explains that the line of credit will stay open so she won’t have to reapply if she needs to get cash again. He also tells her that it’s important to pay as much as she is able to and make more than the minimum payments.

Here’s how a Line of Credit Works: 

Let’s say you are approved for $500. This means you can take a cash advance for any amount up to the credit limit of $500. You do not have to take all the cash at once. For example, you may only need a cash advance of $100 for the time being. This leaves you with $400 available credit. Let’s assume your billing cycle is 14 days. Your billing statement arrives, and you have several options to pay:

  • Pay your minimum payment of $12.22
  • Pay off your balance which will be $110.72
  • Pay any amount in between.

Because this is an open line of credit, even if you pay the balance to zero, your line of credit stays open.

This part is really important – Please remember this is an expensive form of credit. The annual percentage rate (APR), which is the cost of your loan expressed as a yearly rate is 279.5% in Tennessee and varies based on the state you are in. Only borrow what you can afford to pay back. There is no grace period. Interest and fees will be charged every day you keep the money. We recommend you pay more than the minimum payment. Making only the minimum payment will result in more interest, and it will take longer to pay off you balance.

How to Get an Online Line of Credit with Advance Financial

Ready to apply for an Advance Financial Line of Credit today? To get approved click on “Get Cash Now” at the top of the page. Depending on your state, you will be offered an online line of credit or an online installment loan to get the cash you need. Fill out our quick and easy application form, and our team will be here to answer all your questions and offer a world-class customer experience throughout the process.

*Bank participation required