line of credit
Học thuậtThân thiện
Definition
- Noun:
- The maximum credit that a customer is allowed: A financial arrangement where a lender extends a specific maximum amount of money that a borrower can access and use as needed. The borrower only pays interest on the amount of money actually withdrawn, not on the entire available credit line.
Usage Examples
- Noun:
- The bank approved a substantial line of credit for the small business.
- She used her home equity to secure a line of credit for home renovations.
- Managing a line of credit responsibly can help improve your credit score.
Advanced Usage
- "to draw on a line of credit": to withdraw funds from an available credit line.
- The company will draw on its line of credit to cover the unexpected expense.
- "to have a line of credit in place": to have a pre-approved credit arrangement ready for use.
- It's wise for a startup to have a line of credit in place for cash flow fluctuations.
Variants and Related Words
- Credit line (n): A common synonym for "line of credit."
- He checked the available balance on his credit line.
- Revolving credit (n): A broader category of credit that includes lines of credit, where the credit replenishes as debts are paid.
- A credit card is a common form of revolving credit.
Synonyms
- Credit limit: The maximum amount that can be borrowed.
- Credit facility: A formal financial arrangement for extending credit.
Related Phrases
- Open a line of credit: To establish this financial arrangement with a lender.
- They decided to open a line of credit to finance the new equipment.
- Secure a line of credit: To obtain a line of credit, often by offering collateral.
- The business secured a line of credit using its inventory as collateral.
Related Idioms
- A financial safety net: While not an idiom containing the target phrase, a line of credit is often described as one.
- Their line of credit served as a crucial financial safety net during the slow season.
Noun
- the maximum credit that a customer is allowed