Understand a personal line of credit
How does a personal line of credit work?
A line of credit lets you borrow, repay and borrow again within an approved limit. Interest normally starts when you use the money. A minimum payment that covers only interest does not reduce what you owe.
Where to begin
- Choose between secured and unsecured borrowing; identify any asset at risk.
- Compare the variable rate, fees and minimum-payment requirements.
- Provide the income, debt and credit information the lender requests.
- Set a repayment amount that reduces principal, not just interest.
- Review statements and allow room in your budget for rate increases.
Before you open the official service
- Budget and existing debts.
- Proposed limit and lender’s agreement.
Keep your actual documents and account details off this website. Use the official service’s current checklist before applying.
What to check for your situation
Approval and rates depend on the lender’s assessment. Available credit is not the same as affordable borrowing.
Fees, processing times and document rules can change. This page helps you navigate; it does not confirm eligibility or replace the government’s instructions.
Official sources
Prepared by Active K Digital from the linked public guidance. Read our source approach.