A line of credit is the maximum dollar amount of credit the lender has made available to a borrower. The borrower can withdraw funds up to this amount as needed, and interest is only charged on the amount withdrawn. It is a flexible form of borrowing as the borrower can access funds quickly and easily as and when required.

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A Line of Credit Is

Question 66

Multiple Choice

A line of credit is

A) The equal payments required for one-time loans.
B) The loan amount for installment cash credit.
C) The maximum loan amount for closed-end credit.
D) The maximum dollar amount of credit the lender has made available.
E) The monthly payment required for single lump-sum credit.

Correct Answer: