June 2, 2016
There are times in life when you need an extra boost. Pam and Aubrey want to get ahead on their debt as they are expecting their first child. Claire and Marshall wake up one day to discover that the pipes in their bathroom needed a major overhaul. Self-employed Vera and Isaac want to jumpstart their investments during a slump in Vera’s income.
All these people were able to achieve what they set out to do by using a line of credit. Different from a loan or a credit card, a line of credit (LOC) has a place for almost all Canadians.
What it is
While a typical personal loan provides a set amount of cash, a LOC acts more like a credit card, allowing you to access the funds only when they are needed. A LOC typically has a lower interest rate and a higher limit than a credit card.
There are a number of different kinds of LOCs, but they typically fall within two categories:
When to use it
As with all loans, it’s important to think carefully when taking out an LOC. A debt-dependent lifestyle can hinder your financial and personal growth. But when used conscientiously, they are a valuable tool to have in your financial arsenal.
Some examples of how a LOC could be used:
A line of credit can be a lifesaver, but it can’t fix every problem. The flexibility and low interest rate of a line of credit can provide the financial boost needed in a variety of situations, but developing a repayment plan is essential.
When faced with difficult financial decisions, the best strategy is always to weigh your options, and get professional advice. Discuss your options with SafeBridge today.
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