A strong credit rating and verifiable income are typical requirements for a personal line of credit, according to Bankrate. A good relationship with the lending institution can also be helpful when seeking approval. Lenders require consumers to have strong financial profiles, because personal lines of credit require only a signature and no collateral.Continue Reading
Healthy financial profiles help consumers get their personal line of credit applications approved, says Bankrate. This means that it is more advantageous for consumers to apply for personal lines of credit when they do not need the money than when they do. In addition to strong earnings and good credit, some personal line of credit lenders may require applicants to show assets. Assets include stocks, bonds, mutual funds and certificates of deposit. A personal line of credit applicant can also show a healthy retirement account as proof of ability to repay the loan, says CreditCards.com.
Personal lines of credit provide convenient access to funds, says Bankrate. Consumers can write personal checks to use the funds, withdraw them at automatic teller machines or transfer them online. Personal lines of credit have higher interest rates than home equity lines of credit, or HELOCs, which is a drawback.Learn more about Credit & Lending