This type of loan is an interest only variable rate loan secured against a residential property, allowing access to funds whenever you need them. Such loans have the added flexibility of a transaction account within the same account, and are full of features.
These products are a flexible way to raise funds for any purpose by providing cash at call, up to the credit limit. You can use the money as you need it and pay it back when you want.
A line of credit also allows the borrower to access the account to meet day to day living expenses. These types of loans allow interest only repayments, but some lenders may require principal and interest repayments to ensure principal reduction is being made.
The interest rates available on lines of credit are a bit higher then other home loan products but are much lower than the rates on credit cards or personal loans.
You will have to be a very responsible spender with this type of loan since you may erode all the equity in your home. However, for most home owners a line of credit is the most cost effective loan available and is hence the most sensible choice.
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