How to Borrow Against a Line of Credit
A line of credit is essentially a personal or business loan that is available at any time. Credit lines can take the form of credit cards, small business loans or home equity lines of credit. Some lines of credit are secured with collateral, such as your home, while others are unsecured, such as credit cards. Therefore, borrowing from a line of credit could be as simple as swiping your credit card or as complex as refinancing your home.
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Instructions
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Secure a line of credit. Before you can borrow from a line of credit, you'll need to apply for one. That may mean applying for a credit card or filling out an application for a business line of credit from your bank. The application process to secure a line of credit may be as easy as providing your name, personal information and income or as complex as providing a detailed business plan.
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Contact your creditor and inform them of your decision to access your line of credit. This may not be necessary in all cases; however, if you plan to access a home equity line of credit, you will need to inform your lender. Most businesses are able to access bank secured lines of credit through electronic transfers. Consumers can access personal lines of credit by merely swiping the card issued by their lender or providing their account information online.
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Review the terms of your credit agreement and sign any necessary documents. Again, this step may not be necessary when accessing ordinary business or consumer lines of credit but it is necessary with home equity lines of credit that often involve refinancing your home. Once you have reviewed and signed all of the necessary documentation, your lender will provide the funds that you requested.
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