CREDIT LINE Meaning and
Definition
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A credit line refers to a financial arrangement between a borrower and a lender, where the lender approves a specific maximum amount of funds that the borrower is eligible to borrow. It is a pre-determined limit on the amount of credit that can be extended to an individual or business entity. The borrower has the flexibility to access funds from the approved credit line whenever needed, up to the defined maximum limit.
A credit line is typically established by banks, credit card companies, or other financial institutions. It can be in the form of a revolving credit facility, such as a credit card or a home equity line of credit (HELOC), or a non-revolving credit line, like a business loan.
The credit line definition may vary depending on the context. On a personal level, individuals with a good credit history and financial reputation may qualify for higher credit limits. For businesses, credit lines are often utilized to manage cash flow fluctuations, cover operational expenses, or fund short-term projects.
Interest is charged on the outstanding balance, and as the borrower repays the borrowed funds, they free up credit available to be used again. Credit lines offer flexibility, convenience, and quick access to funds. However, it is important for borrowers to properly manage their credit lines, make timely repayments, and ensure they do not exceed the approved credit limit to maintain a healthy credit profile.
Common Misspellings for CREDIT LINE
- xredit line
- vredit line
- fredit line
- dredit line
- ceedit line
- cdedit line
- cfedit line
- ctedit line
- c5edit line
- c4edit line
- crwdit line
- crsdit line
- crddit line
- crrdit line
- cr4dit line
- cr3dit line
- cresit line
- crexit line
- crecit line
Etymology of CREDIT LINE
The term "credit line" originated from the Latin word "credere", which means "to believe" or "to trust". In the 16th century, it evolved into the Old Italian word "credito", representing "belief" or "trust". As the concept of borrowing money developed, the phrase "line of credit" emerged, referring to the trusted relationship between a lender and borrower. It eventually became "credit line", denoting an arrangement allowing an individual or business to borrow money up to a certain limit.
Similar spelling words for CREDIT LINE
- credit loan,
- creditable,
- credit crunch,
- credit order,
- credit side,
- credit system,
- credited,
- creditor,
- Crediting,
- credit union,
- credit card,
- line credit,
- grated linn,
- credit hour,
- credit bureau,
- creditworthy,
- credit entry.
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