It’s Tuesday afternoon. Your washing machine floods the laundry room. You need a plumber and new appliance ASAP, but your emergency fund is depleted, your credit cards are near their limits, and your next paycheck is still days away.
You grab your smartphone, type “Best personal line of credit” into Google, and if you’re fortunate, you’ve landed here.
Why fortunate?
Because our team is dedicated to recommending only the most reputable and beneficial personal line of credit options available.
Whether you’re seeking an instant approval personal line of credit or exploring options for a personal line of credit with bad credit, we’ve got you covered.
Our Top Picks for Personal Lines of Credit: December 2024
- KeyBank Personal Line of Credit: Best Overall
- Fifth Third Bank Secured Line of Credit: Best for High Credit Limits
- Upgrade Personal Line of Credit: Best for Quick Approval
- Avant Personal Line of Credit: Best for Bad Credit
- Wells Fargo Personal Line of Credit: Best for Fair Credit
What is a Personal Line of Credit?
A personal line of credit (PLOC) is a flexible borrowing option that allows you to access funds up to a predetermined limit. Unlike traditional loans, you only pay interest on the amount you use, making it an ideal solution for various financial needs.
Key Features of a Personal Line of Credit:
- Revolving credit similar to a credit card
- Borrow only what you need, when you need it
- Pay interest only on the amount used
- Flexible repayment options
- Suitable for various purposes, from emergencies to planned expenses
Personal Line of Credit vs. Personal Loan: Understanding the Difference
While both are forms of credit, personal lines of credit and personal loans have distinct characteristics:
Revolving credit with flexible borrowing
Pay interest only on the amount used
Ongoing access to funds during the draw period
Variable interest rates typically apply
Personal Line of Credit
Fixed lump sum borrowed upfront
Fixed interest rate on the entire loan amount
Set repayment schedule with fixed monthly payments
Funds disbursed once, no ongoing access
Personal Loan
Best Personal Lines of Credit in December 2024
Based on our research, here are some of the top personal line of credit options available in 2024:
1. KeyBank Personal Line of Credit
KeyBank PLOC Highlights:
- APR Range: 10.75% to 12.25% (variable)
- Credit Limit: $5,000 to $100,000
- Draw Period: 5 years
- Repayment Period: 10 years
- Annual Fee: $65 (waived first year)
KeyBank offers a competitive unsecured personal line of credit with flexible terms and a reasonable APR range. It’s an excellent option for those seeking higher credit limits and extended repayment periods.
2. Fifth Third Bank Personal Line of Credit
Fifth Third Bank PLOC Options:
Unsecured Line of Credit:
- APR Range: 10.75% to 12.25%
- Credit Limit: $5,000 to $100,000
- Draw Period: 5 years
- Repayment Period: 10 years
- Annual Fee: $65 (waived first year)
Secured Line of Credit:
- APR Range: 8.50% to 11.25%
- Credit Limit: $5,000 to $500,000
- Draw Period: 20 years
- Repayment: Interest-only monthly payments
Fifth Third Bank provides both unsecured and secured personal line of credit options, catering to a wide range of financial needs and creditworthiness. The secured option, backed by a Fifth Third Investment account, offers lower rates and higher credit limits.
3. Wells Fargo Personal Line of Credit
Wells Fargo PLOC Features:
- APR: Starting at 10.24% (variable)
- Credit Limit: $3,000 to $100,000
- Minimum Monthly Payment: $25
- No prepayment penalties
Wells Fargo offers a versatile personal line of credit with competitive rates and a wide range of credit limits. This option is ideal for those seeking flexibility in both borrowing and repayment.
How to Choose the Best Personal Line of Credit
When selecting the best personal line of credit for your needs, consider the following factors:
APR and fee structure
Credit limit offered
Draw period and repayment terms
Eligibility requirements
Speed of approval and fund disbursement
Additional features or benefits
Factors to Consider
Instant Approval Personal Line of Credit
For those seeking quick access to funds, some lenders offer instant approval personal lines of credit. These options typically have streamlined application processes and faster fund disbursement.
However, be aware that “instant” approval may still involve a brief review period, and rates may be higher for expedited services.
Personal Line of Credit for Bad Credit
If you have less-than-perfect credit, securing a personal line of credit may be more challenging, but not impossible. Some lenders specialize in offering personal lines of credit for bad credit, though these often come with higher interest rates and lower credit limits.
Consider improving your credit score before applying to access better terms and rates.
Tips for Improving Your Chances of Approval:
- Check and improve your credit score before applying
- Consider a secured line of credit if available
- Demonstrate stable income and employment
- Reduce existing debt
- Apply with a co-signer if possible
Eligibility Requirements for Personal Lines of Credit
While eligibility criteria can vary among lenders, understanding the general requirements can help you assess your likelihood of approval for a personal line of credit. Here’s a breakdown of typical eligibility factors for our top picks:
Eligibility Criteria by Lender
KeyBank Personal Line of Credit
- Minimum Credit Score: Generally 680+
- Income: Stable income required, amount varies
- Residency: Must live in AK, CO, CT, ID, IN, MA, ME, MI, NY, OH, OR, PA, UT, VT, or WA
- Age: 18 years or older
Fifth Third Bank Secured Line of Credit
- Minimum Credit Score: Typically 660+
- Collateral: Must have a Fifth Third Investment account
- Residency: Available in states where Fifth Third operates
- Age: 18 years or older
Wells Fargo Personal Line of Credit
- Minimum Credit Score: Generally 660+
- Income: Verifiable income required
- Existing Relationship: May require an existing Wells Fargo account
- Age: 18 years or older (19 in Alabama)
Upgrade Personal Line of Credit
- Minimum Credit Score: 620+
- Income: Minimum annual income of $30,000
- Debt-to-Income Ratio: Generally below 50%
- Age: 18 years or older
Avant Personal Line of Credit
- Minimum Credit Score: As low as 580
- Income: No specified minimum, but must be verifiable
- Debt-to-Income Ratio: Typically below 70%
- Age: 18 years or older
Remember, meeting these basic eligibility requirements doesn’t guarantee approval. Lenders will also consider factors such as your credit history, current debts, and overall financial stability.
If you’re unsure about your eligibility, many lenders offer pre-qualification tools that can give you an idea of your approval odds without impacting your credit score.
Pros and Cons of Personal Lines of Credit
Personal lines of credit can be powerful financial tools, but like any financial product, they come with both advantages and disadvantages. Understanding these can help you decide if a personal line of credit is the right choice for you.
Flexibility: Borrow only what you need, when you need it
Lower Interest Rates: Often lower than credit cards, especially for good credit borrowers
Interest Only on Amount Used: Pay interest only on the funds you actually withdraw
Potential for Large Amounts: Access to higher credit limits compared to many credit cards
Revolving Credit: Reuse the credit line as you repay, without reapplying
Versatile Use: Can be used for various purposes, from emergencies to planned expenses
Potential for Improving Credit: Responsible use can positively impact your credit score
Pros of Personal Lines of Credit
Variable Interest Rates: Rates can fluctuate, potentially increasing your costs
Potential for Debt Accumulation: Easy access to credit can lead to overspending
Fees: May include annual fees, draw fees, or inactivity fees
Collateral Requirements: Secured lines of credit require assets as collateral
Strict Eligibility: May be difficult to qualify for with lower credit scores
Complexity: Terms can be more complex than simple loans or credit cards
Potential for Reduced Credit Score: Applying and high utilization can impact your credit
Cons of Personal Lines of Credit
When considering a personal line of credit, it’s crucial to weigh these pros and cons against your financial situation and goals.
For some, the flexibility and potentially lower interest rates make a PLOC an attractive option. For others, the variable rates and potential for debt accumulation might be concerning.
How to save $619.00 on your loan
The price difference for a $500.00 loan in 90 days is $619.00.
Using Your Personal Line of Credit Responsibly
A personal line of credit can be a powerful financial tool when used wisely. Here are some tips for responsible use:
Borrow only what you need and can afford to repay
Make timely payments to avoid fees and negative credit impacts
Use for planned expenses or emergencies, not frivolous spending
Monitor your credit utilization ratio
Understand the terms and conditions of your PLOC
Best Practices
Frequently Asked Questions
FAQs About Personal Lines of Credit
What credit score do I need for a personal line of credit?
Credit score requirements vary by lender, but generally, a score of 670 or higher is considered good. However, some lenders offer options for those with lower credit scores.
Can I get a personal line of credit with no credit check?
While rare, some lenders may offer no-credit-check options. However, these typically come with higher interest rates and fees. It’s usually better to work on improving your credit score for better terms.
How quickly can I access funds from a personal line of credit?
Access times vary by lender. Some offer same-day or next-day funding, while others may take a few business days to process and disburse funds.
Is a personal line of credit secured or unsecured?
Personal lines of credit can be either secured or unsecured. Secured PLOCs require collateral but often offer lower rates, while unsecured PLOCs don’t require collateral but may have higher rates.
A personal line of credit can be an excellent financial tool for managing various expenses and providing financial flexibility.
By understanding the options available, including instant approval personal lines of credit and those designed for individuals with bad credit, you can make an informed decision that best suits your financial needs in 2024.
Remember to compare offers from multiple lenders, read the terms carefully, and use your line of credit responsibly to maximize its benefits while minimizing potential risks.
