What is a revolving credit line

A revolving credit line is a type of financial arrangement that allows an individual or business to borrow funds up to a predetermined limit, repay the borrowed amount, and then borrow again up to the same limit. This type of credit line is often used for ongoing or recurring expenses, as it provides flexibility in borrowing and repaying funds as needed. Unlike a traditional loan, which provides a lump sum of money that is repaid over a fixed period of time, a revolving credit line allows borrowers to access funds as needed and make payments based on the amount borrowed. This can be beneficial for managing cash flow and addressing unexpected expenses, as it provides access to funds without the need to reapply for a new loan each time additional funds are required. Revolving credit lines are commonly used for personal expenses such as credit cards or home equity lines of credit, as well as for business purposes such as operating lines of credit or business credit cards. The terms and conditions of a revolving credit line, including the interest rate, repayment terms, and credit limit, are typically determined by the lender based on the borrower's creditworthiness and financial situation. Overall, a revolving credit line provides a flexible and convenient way to access funds for ongoing expenses, manage cash flow, and address financial needs as they arise.