Line of Credit loan
Line of Credit Loan: This is a flexible loan that allows you to have funds transferred to your cheque account when required (it often even has a cheque facility built in).
Consider this like a giant credit card; you pay it off simply by putting money into the loan and leaving it there – generally there are no set repayments - for this reason its generally not suitable for people buying their own home as usually you want to pay these off as soon as possible and it can be difficult to make progress in repaying lines of credit. That’s not to say it can’t be done – it can, but it takes more discipline and understanding.
Often there’s a higher interest rate for a line of credit as well. This type of loan might suit investors who want ready access to cash and the flexibility of a long term interest only loan.