Easy Steps on How to Get a Personal Line of Credit

3 Mins read

A Personal Line Of Credit (PLOC) somewhat resembles a credit card. It is a type of loan from where you can draw any amount that you need and pay back later with interest. A PLOC helps in carrying out day-to-day operations smoothly and maintaining daily cash flow.

If compared to a credit card, a PLOC has a lower rate of interest. Moreover, anyone with a good credit history can easily get a PLOC. If you want to know how to get a PLOC, below is how you do it.

How does it work?

As we said before, a personal line of credit works a lot like a credit card. You have to apply to your preferred bank with a set limit for your withdrawals. Once those are approved, you get to withdraw at any point of time with interest.

You can withdraw through any branch of the bank or even through a bank transfer online. Another thing to note about a personal line of credit is that it comes with an expiration date.

You can continue to withdraw and repay the amount throughout the period you have applied for. But, once the period ends, you will have to apply again if you want to continue the service.

What to use it for?

Usually, a personal line of credit is taken by business owners to fulfill their daily needs. It is mainly for unexpected expenses that can cause a disruption in the cash flow of the firm. For regular households, a PLOC can be used for emergency car repairs, tuition fees, unexpectedly high utility bills, or some other unpredictable expenses.

However, it is to be kept in mind that a personal line of credit can only be applied by someone who has a good credit score and history. Thus, not many people are able to apply for it, and most of its users are from a business background.

What are the benefits and disadvantages?

Below are the pros and cons of getting a PLOC.


  • Easy access to funds at any time.
  • Overdraft protection is offered on some accounts.
  • Competitive rates are provided to you as compared to credit cards or payday loans.
  • No collateral is asked by the lender.
  • Need to pay only for the draws that you make.


  • Interest provided by PLOC isn’t tax-deductible.
  • Difficult to qualify if you have a poor credit score or a limited credit history.
  • The risk of overborrowing is quite high as compared to a credit card.
  • Variable interest rates are there.

How to get a PLOC

You can go to your preferred bank and ask them about the procedure for a PLOC. We, too, have mentioned the steps below so that you can go to your bank prepared.

  • Firstly, you’ll need to make sure you have these two things: a strong credit score and good credit history. There are many online tools that can help you check your credit scores. It is also recommended you get your credit history viewed by some professional.
  • Secondly, you apply to the bank of your preference. While applying to a bank, you should check if the bank is present in multiple locations. It will further help you withdraw from any location at any point.
  • Thirdly, you have to choose a limit for your withdrawals and apply for it. The withdrawal limit you set for your personal line of credit should be supported by your credit score. If you demand more than what your credit score allows, the bank may not accept your application for a PLOC.

The process isn’t difficult; it is the same you usually follow while applying for a loan. All you need to do is fill an application with the things mentioned above. You can also fill the application for a personal line of credit online with the bank of your choice.

Other types of credit lines

There are other types of credit lines that can work for your interest. Since a personal line of credit is mostly used by people with good credit scores, here are some other lines of credit you can choose from:

  • Business lines of credit: It functions the same as a personal line of credit. However, the drawing limit is more, and it is designed specifically for businesses.
  • Home equity lines of credit: Since your home is used as collateral, these are secured types of loan which allow you to borrow through the equity you’ve built at home.

Now you know everything there is about a personal line of credit and how you can apply for it. A PLOC is great; however, you need to keep its limitations in mind before applying for it. You can even refer to a finance professional to get help and learn more about a personal line of credit.

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