How Long Does It Take to Get Approved for a Line of Credit?
How long it takes to get approved for a line of credit depends on what kind of line of credit it is.
For a regular credit card, often the individual will be approved in minutes. This is due to the fact that approval is based on an algorithm and inputs from the user.
Home equity lines of credit, or HELOCs, are usually approved within 2 – 6 weeks.
A business line of credit can take anywhere between a few weeks to a few months.
In general, collateralized loans have a much lower interest rate than non-collateralized loans.
Read more below on what exactly a line of credit is:
How Long Does It Take To Get a Line of Credit Approved? FAQs
Line of Credit (LOC) Definition
What Is a Line of Credit and How Does it Work? Revolving vs Non-Revolving
Lines of credit will either remain open, or will close, once the loan has been repaid.
Revolving lines of credit are considered “revolving”because an individual’s credit is replenished when some or all of the outstanding debt has been paid off.
Non-revolving credit usually has a lower interest rate.
How does a Line of Credit Work? Secured vs Unsecured
Credit card loans are almost always unsecured, which causes creditors to take on more risk and is why credit card interest rates are generally higher and the borrowing limits are generally lower than secured loans.
Using Credit Lines More Responsibly
While a high line of credit can be an indicator of a business’ ability to pay, it is important to be cautious about its risks, too. Learn how you can be more responsible with your credit line by connecting to a financial advisor in Terre Haute, IN. If you live outside the area, please feel free to browse through our financial advisor page instead.
Understanding a Credit Line FAQs
About the Author
True Tamplin, BSc, CEPF®
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.