When to Use a Line of Credit
When you have more complex credit needs or expect you
will need to borrow frequently over a period of time,
a line of credit may be the solution. We have a product
called the Royal Credit Line®.
A Convenient Way to Borrow
A line of credit is a pre-set credit limit that you
can access as you need it. As soon as you repay any
of the credit you’ve used, it immediately becomes
available to you to use again. Once you are approved,
you never have to re-apply.
A line of credit can be useful when you expect to have
ongoing expenses for which you need to borrow money.
For example, someone who is returning to school to get
certification may need to purchase many items on credit
until the course is completed and he or she is working.
Or a family that is making extensive repairs to their
home may draw on a line of credit to purchase materials
and pay tradespeople.
A line of credit is a better choice than a credit card
in these situations because the interest rate is much
lower on a line of credit. It also offers greater flexibility
in making repayments.
Quick and Easy Access
A line of credit can be either secured, usually by
the equity in your home or guaranteed investments, or
unsecured. Generally, an unsecured line of credit has
a slightly higher interest rate than a secured one.
Secured and unsecured lines of credit both work the
same way and are easy to use:
- Once the line of credit is approved, you are able
to borrow money up to the approved credit limit.
- You may borrow any amount, at any time, as long
as you don’t exceed your credit limit.
- You can draw on your line of credit by writing
a cheque, withdrawing or transferring money at an
RBC Royal Bank Automated Teller Machine (ATM), or
by using Telephone Banking or Online Banking.
- Each month, you will receive a statement itemizing
your transactions, showing exactly how much you’ve
borrowed and telling you the minimum payment for that
month.
- You are charged interest only on the amount that
you borrowed.
- As long as you have unused funds in the line of
credit, you may continue to borrow.
One of the key benefits of having a line of credit
is that you have greater flexibility in how you choose
to make repayments. You can pay the entire amount, the
interest only or you can make regular installments of
principal plus interest until you have repaid the full
amount borrowed.
How to Get a Line of Credit
If you would like to apply for a line of credit, simply
visit your
local RBC branch. A representative will walk you
through the application process. You will need to bring
identification and your RBC Client Card to complete
the application.
The content of this website is provided
for the general guidance and benefit of our clients.
This website is for informational purposes only and is
not intended to provide specific advice. See
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