Running a business and taking care of personal finances in the Philippines can be very difficult. A line of credit (LOC) is a great tool that can offer you lots, and I mean lots, of flexibility. This article is dedicated to explaining what a line of credit actually is, how it functions and whether you should consider getting one. This is in addition to an alternative for Dugido loans and the special offer they have rolled out unto new borrowers.
What is a line of credit?
You can access a line of credit from a bank or financial institution at any time. It provides you with a pool of money that is yours and that only you can draw upon as needed. Consider it a financial cushion: you borrow what you have and only pay interest on how much of that you actually use. If you do not tap into the money, you do not owe anything. It’s that simple.
How a Line of Credit Worked
However, if the bank approves your line of credit, they will offer an amount that does not exceed what they believe your creditworthiness permits. After hitting that limit, you can then use this cash on anything from emergencies to business capital or house flipping.
So this line of credit probably consists of being the following fistful.
- Revolving Credit — Borrow, pay back and repeat this process at least until you get up to your credit limit.
- Flexible Repayment — You can repay them full or in part as your cash flow suits you.
- Interest Free on Draw-Downs — You only pay interest on the amount you draw down, not any more than your credit limit.
Benefits of a Line of Credit
A line of credit provides many additional benefits:
- Flexibility: You get cash if and when you need it, eliminating the need to apply for a new loan every time.
- More affordable: Interest rate is usually lower than it would be for traditional loans – as you only pay interest on the part of money that you borrow.
- Convenient: With an available revolving line of credit, it is easy to manage your financial wellness. When now able to pay for random emergencies or invest opportunities when they present themselves.
Who Should Use a Line of Credit?
A Line of Credit is Ideal for Many Situations.
- Small Business Owners: Ideal for working capital, short-term expenses, or long-term opportunities.
- Homeowners: Homeowners should focus on home improvements, repairs, and emergency preparations.
- Irregular income earners: Freelancers, gig workers, and others paid irregularly can draw down on a line of credit when their pay cheques fall short.
An Alternative: Digido Loans
Although a line of credit is useful, it isn’t the only one. Watch our video guide on taking out Digido loans as an alternative. As a direct lender, Digido’s biggest advantage is that they provide your first loan at 0% interest. This can be a good option for you if you want to retrieve money as soon as possible without the pressure of interest rates.
Why Choose Digido Loans?
- It is very attractive for those with short-term cash to own their first loan paid at 0% interest rate potential.
- Digido loans are known for their quick approval, so you should receive the money on time and without significant delays.
- Digido makes applying for a loan so simple and easy; do it online with less time to spend.
Making the Right Choice
Whether you opt for a Digido loan or line of credit is based on what exactly your financial needs are and how it will fit in such circumstances. A line of credit is appropriate if you want to access it on an ongoing basis with flexibility. Though it is safe to say that, if you need a fast one-off loan with no interest charge, Digido is going to make sense.
As a result, it is critical to know how certain options you choose relate to fitting into your financial plan. If you choose to borrow a line of credit or use the Digido 0% offer, do it in awareness and alignment with your financial strategies.
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