The best personal lines of credit offer a revolving credit line without a credit card or the need to put your home up as collateral. They’re different than personal loans, which disperse loan proceeds in a lump sum.
A personal line of credit can save money on interest when don’t know exactly how much money you’ll need. The downside is that personal lines of credit are hard to find. Only some banks offer lines of credit and most reserve them for existing customers. You’ll have an easier time finding an unsecured personal loan which can still save you a lot of money on interest relative to a credit card.
Best personal lines of credit overview
- Best for large credit lines up to $250,000: Truist
- Best for small credit lines: Key Bank
- Best for low rates: US Bank
- Also great: Regions Bank
Truist (formerly SunTrust)
APR: Variable rates as low as 13.69% APR- Borrowing amounts: $5,000 to $250,000.
- Line term: Up to four years.
APR: Variable rates as low as 13.69% APRTruist is unique among the lenders featured in this list because of its unusually large credit limit of $250,000. This makes the lender a great choice for borrowers with significant expenses who are looking for a flexible way to fund purchases. This personal line of credit comes with variable rates, and can be extended for up to four years.
Because of the high credit limit, a personal line of credit from SunTrust does come with some additional qualifications you’ll need to satisfy in order to be approved. The lender requires that applicants have verifiable assets of over $100,000 in order to demonstrate liquidity. This means that this personal line of credit is out of reach for borrowers who don’t have valuable assets saved up.
SunTrust’s personal line of credit has no application fee or annual fee, and borrowers can secure a 0.25% discount when they set up automatic payments from a SunTrust bank account.
US Bank
APR: 12.50% to 22.50% APR- Borrowing amounts: Up to $20,000.
- Line term: Continuous.
US Bank features an easy, convenient online application for a personal line of credit. Credit limits of up to $25,000 are available. You do need to be a US Bank customer in order to qualify, but it’s easy to set up an account with them.
A personal line of credit also features the same low APR for balance transfers, advances, and purchases. Whether you’re using the line of credit for a home improvement project, to consolidate high-interest debt, or to finance a significant expense, you can only borrow as much as you need to and save on interest when compared with a traditional personal loan.
There are no annual fees for a personal line of credit from US Bank, and you can access funds using a Visa Access Card, checks, online, over the phone, or in-person at a bank branch.
Key Bank
- APR: Variable based on the Wall Street Journal Prime Rate.
- Borrowing amounts: $500 – $25,000.
- Line term: Continuous.
Key Bank is a great option with two line of credit products: A basic line of credit in amounts between $500 and $5,000 and a preferred line of credit in amounts up to $25,000.
Note that a personal line of credit from Key Bank is only available in fifteen states. Key Bank is currently available to customers in Alaska, Colorado, Connecticut, Idaho, Indiana, Massachusetts, Maine, Michigan, New York, Ohio, Oregon, Pennsylvania, Utah, Vermont, and Washington.
Regions Bank
- APR: Variable based on the Wall Street Journal Prime Rate.
- Limit: $50,000.
- Line term: Continuous.
Regions Bank offers flexible, convenient personal lines of credit to borrowers. After SunTrust, Regions has the second-highest credit limit on this list at $50,000. Whether you’re looking to fund a home improvement project or another significant expense, a personal line of credit from Regions has got you covered.
One handy feature of this personal line of credit is that it comes with rate discounts ranging from 0.25% to 0.50% if you set up automatic payments. However, this personal line of credit does come with an annual fee of $50, an over-limit fee of $29, and a late fee of $35.
Borrowers can apply online for a personal line of credit, but you do need to already be an existing Regions customer for at least six months to use this option. You can also apply in person or over the phone.
Editor’s note: This article previously included line of credit options from PNC and PenFed Credit Union. Upon review, those products have been discontinued. If you know of a bank or credit union offering personal lines of credit, please let us know. All information, including APRs, has been collected independently by our editors at the time of publication. Loan terms change frequently; always verify the latest rates and terms with the lender.
Personal lines of credit vs personal loans and credit cards
Personal lines of credit are surprisingly hard to find. That’s probably because there is such an abundance of credit cards on the market.
Lines of credit vs credit cards
Although credit cards offer the same ability to borrow money on a revolving basis and make flexible payments over the time, most of them feature significantly higher interest rates. You also cannot easily write a check against a credit card or transfer funds from a credit card to your bank account without incurring usurious cash advance fees and interest rates.
Lines of credit vs personal loans
Personal loans are the next closest thing. They’re readily available from banks, credit unions and online lenders. Personal loans offer lower interest rates and higher loan amounts than credit cards. The “catch” is that they’re loans, not revolving lines of credit. When you are approved for a personal loan, you get the loan amount in a lump sum. That’s great if you’re trying to consolidate debt or know exactly how much cash you need for a big purchase. It’s less helpful if you’re renovating a house or starting a business and need different amounts of cash at different times.
Of course, you can take out a personal loan and simply keep the loan proceeds in savings until you need the funds. But you’ll be paying interest each month on the full amount. The upside is the best personal loans do not charge prepayment penalties, so if you find you borrowed more than you need you can always pay back the difference early.
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How we came up with this list
When looking for lenders that offered personal lines of credit, I looked for lenders that featured flexible credit limits, competitive rates, and served customers all over the country.
Flexible credit limits
Personal lines of credit are a great fit for projects where you aren’t sure of the budget beforehand, from home renovation projects to freelance cash flow shortages and everything in between.
I looked for lenders with flexible credit limits ranging from a few thousand dollars to tens of thousands of dollars.
Competitive rates
I looked for lenders that offered competitive rates on personal lines of credit. Most lenders base their variable rates on the Wall Street Journal Prime Rate, although some offer a flat rate instead.
Like personal loans and credit cards, personal lines of credit accumulate interest that you’ll have to pay back in addition to what you borrow. This means that securing a low rate can help to save you money over time.
Geographic range
There are many smaller, local banks and credit unions that offer personal lines of credit. These can be a great option for borrowers looking for the personalized service of a smaller financial institution. However, when coming up with this list, I tried to include banks and credit unions that are available in a wide range of locations, with an emphasis on larger regional and national banks.
What is a personal line of credit?
A personal line of credit combines elements of both a personal loan and a credit card. Borrowers apply for a revolving line of credit from a bank or lender, which they can then continually borrow against and pay back over time.
Personal lines of credit often come with lower interest rates than credit cards and are more flexible than a personal loan.
Why should (or shouldn’t) you use a personal line of credit
Wondering if a personal line of credit is right for you? While a personal line of credit is a flexible, convenient form of borrowing, it doesn’t make sense in all situations.
Who should consider a personal line of credit
You should consider a personal line of credit if you have a significant expense on the horizon, but aren’t sure exactly how much it will cost. For example, if you’re looking to renovate your house or complete a home improvement project, you might want to apply for a personal line of credit in order to cover these expenses.
Personal lines of credit tend to come with lower rates than credit cards, but they also may be more for borrowers with poor credit to qualify for.
Who shouldn’t consider a personal line of credit
If you know exactly how much you’ll need to spend on a project, you might want to consider a personal loan instead of a personal line of credit. Personal loans allow borrowers to access a lump sum, then pay it off over time in fixed monthly payments.
Because personal lines of credit can come with the temptation to overspend, they may also not be the best fit for borrowers looking to stick to a strict budget.
Most important features of personal lines of credit
When it comes to deciding on a lender for a personal line of credit, there are a few things you should take into consideration.
Credit limit range
You should look for a lender that has a flexible credit limit range depending on your needs. Some lenders only offer personal lines of credit of a few thousand dollars, which may not be enough for your particular project or expense. Other lenders offer personal lines of credit up to hundreds of thousands of dollars, although these often have to be secured by collateral or dependent on proof of income. Many personal lines of credit have an upper limit in the $20k range.
Low rates and fees
Most lenders base their rates on the Wall Street Journal Prime Rate, but you should be sure to compare rates and fees in order to ensure you’re getting the best deal. Choosing a lender with low rates and fees can help you to save money and pay down debt faster.
Continuous term limit
Depending on your needs, you may want to look for a lender that offers continuous term limits, with no fixed end date to the credit line. This means that you can continue to borrow against your personal line of credit when you need to, without having to reapply.
Flexible application and payment options
Not all lenders allow borrowers to apply and manage their account completely online, so be sure to look for lenders that support this option if it’s important to you. On the other hand, if you prefer to do your banking in person, you might want to consider banks and lenders with brick-and-mortar locations in your area.
Summary
While somewhat lesser-known, personal lines of credit are a great option for borrowers that combine some of the best elements of both credit cards and personal loans. While personal lines of credit aren’t the best fit for every situation, they’re a good choice if you have a significant expense with an uncertain budget.