A line of credit is a written promise to repay the loan principal plus interest at a specific future date.

Question

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A line of credit is actually a type of loan where the borrower can access funds up to a predetermined limit and pay interest only on the amount borrowed. The borrower can withdraw and repay funds as needed and does not have a specific future date for repayment of the full loan principal.

A Line of Credit Is a Written Promise to Repay