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Revolving Line Of Credit
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A revolving line of credit is a type of credit that can be borrowed up to a pre-determined amount, repaid, and then borrowed again. The money borrowed under a revolving line of credit is not loaned out in a lump sum. Instead, under a revolving line of credit the borrower is extended a line of credit up to a certain amount, to draw from as he pleases. In most cases a revolving line of credit has a variable rate rather than a fixed rate. A revolving line of credit may or may not be secured by collateral. In contrast to an installment loan, a revolving line of credit typically does not have a set schedule for the repayment of principal. Examples of a revolving line of credit include credit cards and home equity lines of credit.
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