When you are in dire need of funds and want to borrow money, then a personal line of credit can be your solution. Your lender charges interest only on the amount you borrow and are required to pay the borrowed amount and the interest in regular installments. With a personal line of credit, you can solve any of your financial worries and need not pledge your assets as collateral. So, if you are planning to apply for a line of credit, but want to clear off the most common myths about it, then you are at the right place! Only banks provide a personal line of credit – Myth 1 While it is true that banks do extend credit lines, it does not necessarily mean that they are the only source for a line of credit. Many other financial institutions like non-banking finance companies (NBFCs), credit unions, and other online lenders also provide personal lines of credit products. As a borrower, it is also very essential for you to know that online lenders often have broader eligibility criteria when compared to banks. A personal line of credit is a bad option – Myth 2 There are many ways through which you can access credit whenever you are in dire need of it. Either by borrowing money from friends and relatives or by borrowing credit from financial institutions. Often, many people believe that by taking credit you end up falling into debt traps or indulging in overspending, and hence, this establishes a fact that why many people are afraid to take credit. Remember that, any type of credit, when used wisely, can help you save money and make you financially stable in the long run. If you are taking credit through a credit line and repaying it on time, then it gets reflected in your credit history, which in turn gives you a better credit score, and in turn, helps you get a reasonable interest rate on larger loans. So, if you are responsible with your finances, you can gain a lot more than lose when you avail of a personal line of credit. With a personal line of credit, you can resolve your debt consolidation, pay off medical costs, refinance your existing debt, renovate your home, etc. You should not accept a hiked credit limit – Myth 3 A credit utilization ratio is a ratio that depicts how much credit you have used to the total amount of credit you have. Ideally, a credit utilization ratio should be less than 30%, demonstrating a healthy financial situation. But on the other hand, if you are having a high credit utilization ratio, then it depicts you as a high-risk borrower and can negatively impact your credit score. If you are in a situation, where your expenses are greater in comparison to your credit limit, then you can ask for a credit limit increase. This way the ratio of your credit usage to total credit remains the same or even below 30%, and also helps you boost your credit score while meeting your expenses. Processing and approval time for a line of credit is usually longer than other traditional loans - Myth 4 Considering the present circumstances, there are many instant loan apps like the Cashearly loan app, that instantly process and approve a line of credit under minimal documentation and easy eligibility. With a Cash early loan app, by your side, you can also disburse the credit into your account immediately. This itself confirms that a personal line of credit is ideal, especially during emergencies. Cashearly is a loan-offering product of a non-banking finance company (NBFC) called Sunita Finlease Limited, which offers a personal line of credit under easy eligibility. Then why wait? Apply now and get a personal line of credit up to 20,000 online with Cashearly.