This term means a type of banking service, which involves the issuance of funds to a legal entity or individual of a certain limit and for a certain period of time.
Those. in simple terms, the bank provides the borrower with a loan, for example, for a year, in the amount of 1 million rubles. And it differs from a regular loan in that you can use the funds in shares, and not in the entire amount at once. For example, 500 thousand in six months.
Types of credit lines.
The credit line service is provided for the purpose of paying for the delivery of any goods. Note that an agreement with suppliers who make delivery is required. And the line is also limited in time. The funds go exactly for the purposes that are spelled out in the contract, i.e. if the document specifies the delivery of the goods, then you cannot spend the credit limit on the purchase of a truck. And it turns out that in this case, the credit line is used within the framework of the agreement.
It is characterized by the fact that the money in the account may not be spent as needed, but stored and used as needed.
This type of line is similar in its system to a credit card. The bank has not determined the exact terms of repayment of the loan, there is only a specific date, after which, there are penalties.
This type is very popular among borrowers. Its essence lies in the fact that there is an amount and there is a term. During this time, the amount can be withdrawn from the account an unlimited number of times. Each time the money is credited to the account again, the loan is repaid, and after a while, the borrower will again have access to the amount provided to him by the bank for the first time.
This type does not imply a new account replenishment, after the full repayment of the amount first provided to the client, the amount is not renewed again
This banking service is convenient to use, because the limit and type of credit line is chosen by the client himself. The interest on the line is usually lower than on a classic loan, and, unlike it, the interest is calculated only in the case when the client uses funds.