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Personal Lines of Credit
When unexpected expenses arise, you’ll typically need instant assistance without the lengthy processes of traditional bank loans. A personal line of credit can become a flexible option for a wide range of urgent needs.
This product functions as a backup source of funds you can access when needed. You only pay interest on what you use. It’s not a free pass to money, but it can give you a break from financial troubles.
BadCredify is here to explain how these products work and help you find an optimal solution for your current needs.
Best Lines of Credit in 2025
- You need a credit score of at least 620
- Provide proof of income
- Specify your Social Security number
- Provide proof of identity
- Specify your employment status
- Origination fees from 1.99% to 6.99%
- Discounts on interest rates
- Debt consolidation loans with direct payments to creditors
- Soft credit check at the prequalification stage
- Opportunity to get joint loans
- Origination fee from 1.99% to 6.99%
- High minimum loan amount
- No mobile app for Android or iOS
24 – 72 hours from approval
Fair or good credit borrowers who want to cover their credit card debt.
Achieve can approve loans on the same day, but it takes one to three days to get money. All personal loans offered by the company are subject to origination fees. Achieve’s minimum loan is $5,000. It may not work if you need a small personal loan.
Achieve’s personal loans offer competitive rates and adjustable terms. These loans could work well for people seeking high loan amounts who don’t mind an origination fee. The service also provides various interest rate discounts.
- Joint loan option
- Discounts on interest rates
- Be a U.S. permanent resident
- Live in a qualifying area
- Be at least 18 years old
- Have a valid email address
- Have a valid personal checking account
- Provide income confirmation
- Origination fees: 1% to 5%, depending on your state
- Cash advance fees: 10%
- Late payment fees: vary by state
- Non-sufficient funds fees: None
- Next-day funding
- No application fees or prepayment penalties
- Bad credit is accepted
- Flexible repayment terms
- Convenient minimum loan amounts
- Very high APRs
- Low loan maximums
- Origination and late payments fees may be charged
- Not available in all states
Next business day
Borrowers with bad credit in need of fast cash
NetCredit helps bad credit borrowers qualify for personal loans and credit cards. Despite fast approval and funding, APRs and fees are high. Additionally, NetCredit is unavailable in 14 states.
NetCredit offers cheaper alternatives to regular personal loans and provides bad credit individuals with more flexibility. Additionally, it has fast funding times and allows borrowers to improve their credit.
- The ability to change the due date;
- Refinancing with the same lender in some states;
- Credit-building opportunities.
- Be at least 18 years old
- Prove your US citizenship or permanent residence
- Provide your bank account information and social security number
- Show your monthly income by providing pay stubs, tax forms, or bank statements
- Provide an active email address and phone number
- Optional fees (up to 6%)
- Low interest rates
- Co-applicants are allowed
- No prepayment penalties
- Flexible loan amounts
- Interest rate discounts are available
- Multiple repayment options
- No origination fee
- Good credit is required for better loan terms
- Hard credit check if you continue your application
- Late fees might apply
- No co-signer option available
- No physical branches
One to three business days
Applicants with good to excellent credit scores who want to consolidate debt, make major purchases, or cover their long-term needs.
SoFi is a financial website that provides unsecured personal loans. The company doesn’t specify its minimum credit score requirements, but most of its borrowers have credit ratings of 680 and higher. Loans from SoFi are also accessible with a co-borrower with good to outstanding credit. Personal loan candidates need to have a sufficient income and a low debt-to-income ratio.
SoFi does not do credit checks on its customers when they prequalify for a loan. Instead, it examines applicants’ whole financial situation. The company offers reasonable interest rates and flexible repayment terms to qualified borrowers.
- No prepayment penalties
- No origination fees
- Low interest rates
- APR discounts
- Co-applicant option available
What Is A Personal Line Of Credit?
A personal line of credit is a form of borrowing that provides you with a certain credit limit that you can use when needed. The main advantage of this approach is that you only pay interest on what you use, not the whole sum available to you.
Lines of credit are revolving, meaning that you can use a certain amount, pay it back either in full or by making minimum payments, and access the money again. This flexibility allows you to finance large purchases or overcome emergencies fast when they arise and cover the costs over time.
How Does a Personal Line of Credit Work?
A personal line of credit works similarly to a regular credit card but has its nuances. While it also allows you to tap into money within a certain limit, it comes with no grace period. PLOCs typically have two phases: a draw period and a repayment period. Here’s a closer look at how it works.
Draw Period
The draw period refers to a term within which the line of credit is available for use. You can access money up to the approved limit as needed and only pay interest on what you actually spent. However, interest begins to accrue from the moment the money is used.
The draw period is usually 2 to 7 years. During that time, you have three options: make minimum, interest-only monthly payments, pay your balance off in full, or pay a bit more than the minimum to reduce the interest you’ll have to settle in the future.
Repayment Period
Once the draw period ends, you reach your repayment period. This means that you won’t be allowed to use the funds since that. You start to repay both your principal and interest, which can dramatically increase your monthly payment. The repayment period usually lasts from 5 to 10 years.
Types of Personal Lines of Credit
PLOCs can be divided into two types: secured and unsecured. Secured lines require collateral, often in the form of your property or a savings account balance. By providing extra security, a borrower can get a lower APR or a higher credit limit.
Unsecured lines of credit are the most common options that don’t require any repayment guarantee except for your signature. This means that the limit and the APR will be determined based on your credit score and the overall financial situation.
Rates & Fees
Personal lines of credit come with variable interest rates that are tied to a prime rate. On average, PLOC APRs are between 11.5% and 25%, with a lower rate being offered to borrowers with good to excellent FICO ratings. Some credit lines for bad credit individuals may come with interest rates of over 36%.
Besides an interest rate, lenders may also charge a wide range of extra fees, such as:
- Application fees
- Origination fees
- Annual maintenance fees
- Transaction fees
- Late fees
- Cash advance fees
- Over limit fees
Representative Example
Suppose that you get a PLOC with the $5,000 limit, 24-months draw period, 36-month repayment period, and APR of 12.4%. The table below demonstrates how much you will have to pay at the both PLOC stages depending on the amount you use. The calculations are made provided that your outstanding balance and your APR won’t change over the life of the credit line:
| Outstanding Balance / Amount Used | Interest-only Payment (During the Draw Period) | Monthly Payment (During the Repayment Period) | Total Cost |
|---|---|---|---|
| $1,000 | $10.33 | $33.41 | $1,450.49 |
| $2,000 | $20.67 | $66.81 | $2,901.28 |
| $5,000 | $51.67 | $167,03 | $7,253.09 |
Recommended PLOC Uses
A PLOC can be used for a wide range of personal needs. Lenders typically don’t set any restrictions on the PLOC purpose. Here are some situations where you may find it useful:
Pros and Cons of a Personal Line of Credit
Personal lines of credit are handy for getting money when needed, but they may carry some risks. To approach them responsibly, you should weigh the pros and cons.
Pros
- Fast access to funds. You can get the money exactly when needed without waiting days or weeks for approval and funding.
- Relatively low interest rates. Personal lines of credit usually cost less than credit cards.
- No collateral is required. You typically don’t need to provide a pledge to get a PLOC.
- It can be used for various purposes. There is no limit on how you can spend the funds. Use it to cover the unplanned expenses or just pay for basic needs, such as gas for your car or groceries.
- Flexible repayment terms. You can choose to make only minimum payments when your finances are tough or pay more than minimum to avoid interest accumulation.
Cons
- Good credit is required. You will need a credit score of at least 680 to get a personal line of credit.
- Variable interest rates. The interest can fluctuate depending on the economic situation or other changes. This involves the risk of a payment amount increase.
- Potential fees. There can be additional fees, such as application and foreign transaction fee or annual maintenance fee.
- Risk of overspending. If you don’t have a set financial goal or loan purpose, having access to a line of credit could lead to over-borrowing.
- No open-end option. A PLOC is usually not open-ended and requires reapplying at the end of the draw period.
Personal Line of Credit vs. Personal Loan
The difference between a personal line of credit vs. personal loan lies in the way you can access the funds, make payments, and be charged interest.
With a personal loan, you get a lump sum of cash upfront and pay it back in fixed installments over a set period. The interest payments stay the same and apply to the entire amount you borrow.
Unlike a personal loan, instant approval personal line of credit works more like a credit card. You’re approved for a maximum limit, but you can borrow as much as you need up to that sum. Then, you can make minimum, interest-only payments during the draw period or cover the amount used in full. Once repaid, you can use this sum again.
This flexibility makes the personal line of credit suitable for managing fluctuating expenses. However, the PLOC’s interest rate might change depending on the market. It may also result in accumulating more interest over time if you only make minimum payments.
Is a Personal Line of Credit Suitable for Me?
Whether a personal line of credit works for you depends on several factors. Here are a few questions to ask yourself to better understand if it makes sense for you:
- What’s your credit score? Your FICO rating plays a huge role in qualifying for a line of credit and the terms you might get. Higher scores often mean better rates and higher limits.
- What are your money goals? Consider whether a line of credit matches your situation. For instance, if you want flexibility to handle expenses or surprise costs, then it might be good.
- Can you budget for the payments using your current cash flow? Unlike installment loans, a personal line lets you keep borrowing, paying, and borrowing again up to a limit. It may lead to overspending habits and significant debts. Make sure you have a solid plan to pay back anything you borrow.
How to Get a Personal Line of Credit?
Getting a personal line of credit takes a few steps. Here’s a general breakdown of how you can do it:
- Check your credit score to see where you stand. You can do this for free once a year via AnnualCreditReport.com or by requesting your credit report directly from the major credit bureaus (Equifax, Experian, or TransUnion). A good credit score increases the likelihood of getting approved for a personal line of credit and also means you can claim better terms.
- Look at your budget. See how much money comes in and goes out each month. Figure out what you can repay on a monthly basis after covering your other expenses and current debt.
- Research lenders. BadCredify allows you to compare repayment terms, interest rates, fees, payback timelines, and requirements offered by various lenders by completing just one simple form. Do this online and see which option best suits your situation.
- Get your documents together. Prepare any paperwork you’ll need to apply, such as proof of income (pay stubs or tax returns), ID (driver’s license or passport), details on money or property you own, and debts you owe.
- Apply with all your details and documents. The lender will review your credit and finances to decide whether to give you a personal line of credit. It can take from one to a few business days.
- Check the agreement. If you get approved, look closely at the terms, rates, fees, etc. Make sure you get it before signing any documents.
- Receive the money. Once you accept, you can use the line of credit up to your limit and make timely monthly payments according to your schedule.
Alternatives to an Unsecured Personal Credit Line
If a personal credit line seems unsuitable for you, there are a few more options you can turn to. Here are some of the most suitable alternatives.
Credit Cards
A credit card works similarly to a credit line but comes with a plastic you can use directly to make online or offline purchases. It also provides you with an interest-free grace period, which usually lasts up to 30 days. If you manage to repay what you’ve used during this billing cycle, you don’t have to pay any interest on the amount borrowed. Credit cards usually allow cash withdrawals up to a certain limit. However, they come with an extra fee and incur interest from the moment you get the cash.
Home Equity Loans
Home equity loans are secured borrowing options that use the equity you own in your house as collateral. Lenders can give you up to 80% of the equity amount in one lump sum and require you to repay the funds in equal monthly payments. Interest rates on these loans are usually fixed. They also tend to be cheaper compared to lines of credit due to the extra repayment guarantee provided. Still, you can lose your home in case of any problems with your loan repayment.
Home Equity Lines of Credit
A home equity line of credit (HELOC) is a mix of a PLOC and a home equity loan. It provides you with a specific credit limit you can use on any needs against your home equity. You can use the funds within this sum as needed during the draw period, which is typically up to 10 years, and then repay the outstanding balance within up to 20 years. Besides its extended repayment terms, a HELOC usually comes with a higher credit limit and lower APR due to the collateral backing. However, you still put your property at risk in case of any late or missed payments.
Buy Now, Pay Later
BNPL is a good option for various purchases that allows you to split the item’s cost over several months by making the first payment upfront. Such loans typically don’t involve a hard credit check and can be obtained right at the checkout or at the moment you make your purchase online. Many retailers offer interest-free options with the repayment periods of 6 weeks, while large purchases may come with longer terms of up to 12 months and interest rates between 6% and 36%.
Why Choose BadCredify
BadCredify offers a quick and easy way to compare loan offers and find an option that suits you best. Our database contains loan options from various lenders, including those who accept individuals with bad credit. Thanks to this complex approach, we make the borrowing process simple, even for people who can’t access traditional bank products. By filling out just one form, you can receive preliminary offers from multiple loan providers and choose the one with the best possible terms. We do a thorough research and keep our information updated to ensure you can make informed financial choices.
Our experts also share their fair and independent opinions on loan products, create unbiased lender reviews, and provide professional advice on personal finance, debt management, and money borrowing to help you reach a better financial future.
FAQ
How much can I get with a personal line of credit?
Most unsecured personal lines of credit come with an amount of up to $25,000. The exact sum you can get approved for depends on your income, debt level, and credit score. Secured options may offer higher amounts of about $300,000, with the sum being determined based on the collateral’s value.
What credit score do I need to qualify for a credit line?
Traditional lenders typically need you to have a credit score of at least 670 to qualify. However, some loan providers may offer credit lines to borrowers with lower FICO ratings (520 or less).
Can I get a PLOC with bad credit?
Bad credit PLOC options are available if you deal with alternative and online lenders. However, you’re most likely to face less favorable loan terms and high APRs. Additionally, you may consider secured credit lines.
How much does a personal line of credit cost?
On average, personal lines of credit come with APRs between 11.5% and 25%. However, some lenders may charge interest rates as high as 36% or even set three-digit APRs for borrowers with bad credit.
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