A line of credit can be either a formal or informal agreement between borrower and bank regarding the maximum amount of credit the bank will extend to the borrower subject to certain conditions.

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This statement accurately describes what a line of credit is. It can either be a formal agreement or a more informal arrangement, but it always sets a maximum credit limit that the borrower can access as needed. The specific terms and conditions of the line of credit will vary depending on the agreement, but typically involve factors such as interest rates, repayment schedules, and penalties for late payment or exceeding the credit limit.

A Line of Credit Can Be Either a Formal or Informal