A personal line of credit combines a personal loan’s spending power with a credit card’s flexibility. Personal lines of credit can be a smart way to pay for various expenses, including home improvements, weddings, or other major expenses.
If you think a personal line of credit might be right for you, finding the right lender is important. To make that easier, we’ve researched the best personal lines of credit from different lenders. We’ll also share some key tips for choosing a personal line of credit.
In this guide:
- How a personal line of credit works
- How to identify the best personal line of credit for you
- 4 of the best personal lines of credit
- Understanding eligibility, rates, and limits
- Common uses for a personal line of credit
- The pros and cons of a personal line of credit
- Alternatives to a personal line of credit
How a personal line of credit works
A personal line of credit is a revolving credit line that allows you to borrow money up to the limit established by your lender. Your available credit can increase or decrease as you make withdrawals and payments. In that sense, personal lines of credit are similar to credit cards.
You can reuse your credit for the duration of its “draw” period, which can last a few months or several years. After the draw period ends, your account enters repayment, and you can no longer use it for transactions. You’ll pay interest but only on the amount of your credit line that you use.
A personal line of credit is best when you need access to a flexible amount of cash over an extended period. A personal loan won’t allow for long-term flexibility, and credit cards often carry lower credit limits, higher interest rates, and fees for a cash advance.
How to identify the best personal line of credit for you
Several lenders offer personal lines of credit, but it’s helpful to know what to consider when comparing them.
Here are some of the most important factors to weigh to find the right personal line of credit for you:
- Your credit score. Some lenders establish minimum credit score requirements to get approved for a personal line of credit. Knowing your score can give you an idea of which credit lines you will most likely qualify for.
- Interest rates. Since you must repay a line of credit with interest, shopping around for the best rates is a good idea. Keep in mind that credit scores can influence the rates you’ll pay, with a higher score typically translating to a lower rate.
- Borrowing needs. Lenders can set minimum and maximum amounts for personal lines of credit. Estimating what you want to borrow can help you eliminate lenders that don’t fit your needs.
- Collateral. A secured line of credit requires collateral, such as a vehicle or bank account; unsecured personal lines of credit do not. It’s important to weigh which one you’d like to apply for, as unsecured lines of credit may charge higher interest rates.
Also consider how you plan to use your line of credit, as lenders may restrict possible uses. For example, you might be limited to using a personal line of credit to consolidate and pay off credit card debt at one lender, while another may allow you to use the money for anything.
4 of the best personal lines of credit available
Based on the above considerations, we’ve identified four of the best personal lines of credit lenders and how they excel at meeting specific borrower needs.
Best for credit card consolidation: Tally
Personal line of credit
- Prioritizes credit card payments to save money on interest
- No collateral required
- Soft credit check only (will not affect your credit score)
Tally is a credit card manager designed to help you consolidate debts and save money on interest. When you get a personal line of credit with Tally, the money is used to pay off existing credit card balances. Payments automatically go to the cards with the highest APRs first.
According to Tally’s website, the average user saves $4,300 in interest over seven years. These are unsecured personal lines of credit, meaning no collateral is required. You can also learn how much funding you might qualify for without a hard credit check (will affect your credit score).
The interest rate you pay for a Tally personal line of credit depends on your creditworthiness. A minimum credit score of 660 is recommended, though borrowers can get approved with a score as low as 580.
- Recommended credit: 660, though Tally will consider borrowers with scores as low as 580
- Line of credit amount: $2,000 – $20,000
- Rates (APR): 7.90% – 29.99%
- Draw period: N/A
- Repayment period: N/A
- Funding time: Immediate
- Disclosed fees: $0 to $300 annual fee
Best for no annual fee: U.S. Bank
Personal line of credit
- Borrow up to $25,000 with no annual fee
- Low rates for creditworthy borrowers
- Get funding within hours once approved
U.S. Bank offers personal loans and unsecured personal lines of credit. To qualify for a line of credit, you must have a U.S. Bank personal checking account and a minimum credit score of at least 680. If you need to open a bank account before applying, you can do so at a U.S. Bank branch or online.
You can get up to $25,000, and personal line of credit rates are competitive. If you’re getting a personal line of credit for emergencies, you can link it to your U.S. Bank checking account for easy transfers. You can also use it as backup overdraft protection for your checking account.
U.S. Bank is one of the best personal line of credit options for avoiding an annual fee. Once approved, you can manage your credit line at ATMs, online, through the U.S. Bank mobile app, at a branch, or using personal access checks.
- Recommended credit: 680 or higher
- Line of credit amount: Up to $25,000
- Rates (APR): 12.00% – 22.00%
- Draw period: Not disclosed
- Repayment period: Not disclosed
- Funding time: Within one business day
- Disclosed fees: Cash advance fee, cash equivalent fee, foreign transaction fee
Best for a large line of credit: Truist
Personal line of credit
- Choose from secured or unsecured personal lines of credit
- Competitive rates
- Same-day funding, when available
Truist offers several personal lines of credit to meet different needs. The amount you can borrow depends on the credit line that you choose. Here’s how funding limits compare.
- Unsecured personal lines of credit: Borrow up to $50,000
- Secured personal lines of credit: Credit lines start at $25,000
- Ready Now lines of credit: Borrow $300 to $7,500
- Physician lines of credit: Borrow up to $100,000
Truist is one of the best personal lines of credit options if you need to get a larger credit line and you’re looking for competitive rates. There are no application, cash advance, or annual fees associated with unsecured personal lines of credit.
If you have a Truist bank account, you can apply for a personal line of credit by phone. Otherwise, you’ll need to visit a Truist branch to apply. The bank does not specify a minimum credit score required for approval.
- Recommended credit: Not disclosed
- Line of credit amount: $5,000 – $50,000
- Rates (APR): 13.19% – 17.74%
- Draw period: Not disclosed
- Repayment period: Up to 180 months
- Funding time: Same-day funding
- Disclosed fees: None
Best for added benefits: Elastic
Personal line of credit
- Fast funding with no hidden fees
- Borrow smaller amounts
- No interest charges
Elastic offers access to a smaller personal line of credit with no interest charges. You can borrow $500 to $4,500 to cover emergencies or day-to-day costs, with funding available as soon as the next day following approval.
You might consider Elastic if you need funds fast and have a bank account. You’ll need a checking account to receive proceeds from your line of credit.
Rather than charging interest, Elastic charges a cash advance fee and a carried balance fee to access your line of credit. The cash advance fee ranges from 5% to 10%, depending on how often you make payments. The carried balance fee is $5 to $350, depending on how often you make payments.
- Recommended credit: Not disclosed
- Line of credit amount: $500 – $4,000
- Rates (APR): N/A
- Draw period: Not disclosed
- Repayment period: Not disclosed
- Funding time: Next-day funding
- Disclosed fees: Cash advance fee, carried balance fee
Understanding personal line of credit eligibility, rates, and limits
Like many financing options, personal line of credit eligibility and rates are based on several factors, including your credit history, credit score, income, and debt-to-income ratio (DTI). As a general rule of thumb, a high credit score and a low DTI ratio will yield lower rates.
What credit score do you need to get a personal line of credit? It depends on the lender. Some lenders may accept borrowers with a score of 580 or better, while others expect you to have a score of 680 or higher.
For perspective, below is a comparison of how “good” and “bad” credit scores compare, according to FICO.
| Credit score range | Rating | How it affects personal line of credit eligibility |
| <580 | Poor | Difficult to qualifyHighest interest rates |
| 580 – 669 | Fair | Possible to qualifyHigher interest rates |
| 670 – 739 | Good | Broad range of borrowing options availableLess likely to pay the highest interest rates |
| 740 – 799 | Very Good | Easier approvalQualification for the lowest interest rates |
| 800+ | Exceptional | Barriers to approval removedAccess to the best interest rates |
Do credit scores affect how much you can borrow with a personal line of credit? Possibly.
Lenders may be unwilling to approve larger amounts for those with lower credit scores because a larger credit line could mean higher risk to the lender. Even if you have good credit, getting a larger credit line may be difficult if you have a lower income or higher DTI ratio.
Reviewing your credit scores and financial situation before you apply can give you a better idea of what kind of loan terms you might be eligible for. Assessing your credit, income, and existing debt is also helpful for weeding out lenders that may not be a good fit for you.
Common uses for a personal line of credit
A personal line of credit is often a good choice when you need quick access to a large amount of cash. Because a line of credit is flexible, it’s often best for expenses over an extended period or when you’re uncertain how much money you’ll need.
Deciding whether a personal line of credit is the right move can depend on several factors, including:
- Your planned use of the money
- How much it will cost you to borrow
- What you need the funds for
Here are some examples of when you might rely on a line of credit versus other borrowing options.
| When you need cash for | A personal line of credit could help you |
| Home improvements | Pay contractors, purchase supplies, or cover other expenses without having to use a home equity loan or home equity line of credit (HELOC), which is secured by your home. |
| Debt consolidation | Pay off higher interest debts and streamline monthly payments, allowing you to save time and money. |
| Medical expenses | Cover ongoing costs, such as doctor visits, prescriptions, or expenses not paid for by health insurance. |
| Wedding expenses | Fund necessary deposits to caterers, photographers, or other wedding staff; purchase decorations or wedding clothes; or pay for a honeymoon. |
| Day-to-day bills | Fill the gaps in-between paychecks so you don’t have to worry about running short on cash. |
| Unexpected expenses | Pay for things like car repairs, vet bills, or other unplanned expenses without having to use a credit card with a high APR. |
Is a personal line of credit always the best way to pay? It depends.
A personal line of credit offers access to cash, but there may be better ways to fund large expenses. For example, you may consider a HELOC instead if you plan to use the money for extensive home projects.
HELOCs are secured lines of credit that leverage your home’s equity. They often have lower rates, and interest may be tax deductible—unlike a personal line of credit.
Again, you have to keep in mind that your home serves as collateral, so if you’re not comfortable with that, you might opt for a personal line of credit instead.
The pros and cons of a personal line of credit
Personal lines of credit can offer advantages and disadvantages to borrowers. Comparing the pros and cons can help you to decide if a personal line of credit makes sense.
Pros
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Funding is often quick, with credit line access available in just a few days.
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Personal lines of credit rates can be less than what you’d pay with a credit card.
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Flexible access means you can borrow as needed and only pay interest on what you use.
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Depending on the lender, you may be able to get access to a large credit line.
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Most personal lines of credit can be used to cover a wide range of expenses.
Personal lines of credit can also have variable rates that will increase if the market rate goes up. This means your monthly payment may change each month. A personal loan is a better option if you prefer a predictable, fixed payment and rate.
Alternatives to a personal line of credit to consider
A personal line of credit is one of many ways to borrow. You might also consider a personal loan, HELOC, or a credit card to cover planned or unplanned expenses. While they can all put cash in your hands, there are some differences in how they work.
| Rates | Limits | Best for | |
| Personal line of credit | Typically variable | Depending on the lender, you may be able to borrow up to $100,000. | Borrowers who want access to a flexible credit line with the potential to qualify for lower rates than a credit card. |
| Personal loan | Typically fixed | Depending on the lender, you may be able to borrow up to $100,000. | Borrowers who need to borrow a set amount of money and prefer fixed rates and stable monthly payments. |
| HELOC | Variable | Lenders may allow a maximum loan-to-value ratio of 85% – 95%. | Borrowers who want to tap into their home equity and need access to a flexible line of credit. |
| Credit card | Variable | Varies by card | Borrowers who don’t necessarily need cash in hand and want to earn rewards on purchases. |
In terms of how to choose between a personal line of credit and another borrowing alternative, it can be helpful to look at them side by side. Here’s a quick breakdown of how the options outlined here measure up.
Personal line of credit vs. personal loan
A personal line of credit is a revolving credit line you can borrow against as needed. With a personal loan, you get a lump sum of money that you pay back with interest.
Personal loans tend to have fixed interest rates, which could make them more affordable than a variable-rate personal line of credit. If the rate on your credit line adjusts upward, it automatically becomes more expensive.
You might choose a personal loan vs. a personal line of credit if you want the security of a fixed rate and predictable payments or if you know exactly how much you need to borrow. Personal loans typically don’t have annual fees either, though some lenders may charge an upfront origination fee.
Personal line of credit vs. HELOC
A HELOC works like a personal line of credit in that you get access to a revolving credit line. The biggest difference is that your home secures a HELOC.
When you get a HELOC, you borrow against your home’s equity value. You’ll have a draw period, which may last five to 10 years, then a repayment period, which may extend 10 to 20 years. You’ll repay your HELOC with interest during that time, and the rate may be fixed or variable.
You might choose a HELOC over a personal line of credit if you use it exclusively for home improvements or repairs. If the home improvement meets the IRS guidelines for substantially improving your home, you can deduct the interest you pay on your credit line.
However, you might stick with a personal line of credit if you don’t have sufficient equity or you’d rather not use your home as collateral.
Personal line of credit vs. credit card
Credit cards can be convenient for making purchases, and some of the best credit cards include extra perks, such as rewards or travel benefits. A credit card may offer a higher or lower credit limit than a personal line of credit.
There can be a big difference in the rates you pay. Credit card APRs can easily land in the double-digit range unless you’re specifically applying for a card with a low introductory rate. For example, you might get a 0% APR credit card if you want to transfer a balance from a card with a higher rate.
A personal line of credit can allow you to withdraw cash. While you could do the same with a credit card, you’ll typically pay more in interest and cash advance fees. When weighing the two, it’s helpful to consider how you’d use a line of credit vs. a credit card and what it might cost you.