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A line of credit is an interest-only variable loan which is obtained against a home or a residential property. They have the additional flexibility of a transaction account built into the home loan. The interest on line of credit loan is calculated on a daily basis depending on the outstanding balance of the line of credit. So, interest on the credit facility can be minimized by directing all of the borrower’s income into his home loan account.
Line of credit loans operate on similar lines to that of a credit card, wherein the borrower may borrow money to a certain limit and spend it in whichever way he wants to as long as he does not fail to make the minimum monthly interest payment. However, the interest rates on line of credit are much lower when compared to the interest rates of credit cards. The repayments on line of credit loans can be made as one complete payment or as monthly installments.
Most line of credit offers facilities such as check books, ATM cards, Internet and phone banking and a Bpay to enable the borrower to access his loan funds. The credit ceiling is usually dependent on the home equity. The borrower is free to use the loan funds from a line of credit for any purpose such as to meet the day to day living expenses, to purchase property, invest in the share market or even to carry out renovations in the house. However, the greatest danger with a line of credit is that irresponsible and immature borrowers can easily erode the entire equity. Therefore, only those people who are financially disciplined must opt for line of credit loans.
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Any business requires capital. One of the toughest assignments while initiating a new business is to look out for an appropriate funding agency providing a good amount of capital in the form of business loan. 
