Line of Credit

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Line of Credit
Line of Credit Application

Applying for a line of credit is now extremely simple thanks to the internet. Almost anyone can go online, locate and apply for a line of credit in just a few minutes.

Persons who qualify for a line of credit and apply online can begin using their line of credit within a few hours. Line of credit is now a simple process that anybody can perform. All most line of credit applications will ask for is some basic information that anybody can type into a computer.

The application is now the fastest and easiest aspect of the line credit process. Anybody who has access to a computer and the internet should have no problem applying for a line of credit.

Questions to ask Before Filling out the Application

There are some basic questions that everybody should ask before the line of credit application. The first and most important question is: what kind of line of credit do you want? There are several popular kinds of line of credit out there.

A cash line of credit which is also called a checking line of credit is a kind of business credit offered to banks. The advantage to this line of credit is that it can be accessed quickly using a checking account or check card. The disadvantage to these lines of credit is that are only offered to businesses that run a minimum amount of money through their account. You can apply for these lines of credit online fairly quickly and easily. A visit to your bank’s website should show you if you qualify.

A direct or hard money line of credit is made available by online lenders. The advantage to these lines of credit is that can be applied for fairly quickly and are easy to get even for those with bad credit. The disadvantage is that they come with a much higher interest rate and often have to be paid back fairly quickly.

An equity line of credit is a line of credit in which equity in property, usually real estate; is used as collateral. The advantage to equity lines of credit is that almost anybody can get them. The disadvantage is that the amount of credit available is usually limited to the amount of equity available.

What you will need for Line of Credit Application

There are some documents and information that you will need available when applying for a line of credit. The first thing the lender will need is identification numbers so you can verify your identity. These usually consist of your Social Security Number and Driver’s License for individuals and a business identification number for businesses.

The lender will also want other basic information such as your address, the amount of credit you want and possibly banking information. The lender will want your banking information because they will probably directly deposit the funds you borrow into your account. The lender may also want to check your account to see how much money is in it.

Sometimes lenders will ask for other information. Some lenders will request bank statements and other documents that verify cash flow. Hard money lenders in particular want this information because they only lend on hard money.

In some cases the lender will request deed or title information for real estate and other property used as collateral. The lender may also request details of other loans or mortgages you have on the property.

Credit Reports

In a line of credit application a lender may or may not run a credit report. Hard money lenders may forgo a credit report and rely on income verification. Equity lenders on the other hand almost always request a credit report because they base the interest rate on your credit rating.

Always limit the number of line of credit applications you submit because your credit rating can be damaged if too many credit reports are run. Credit bureaus will sometimes downgrade your credit score if a credit report is run on you. So limit your line of credit applications to those who are most likely to approve you.