Question

An advantage of a line of credit from a bank over an installment loan is that: Group of answer choices

if the borrowed funds are repaid, then the credit line is still available for future use without having to apply for another loan.

it is generally an unsecured loan.

the interest rate is competitive with other low-cost forms of credit.

All of the choices are correct.

Answer 1

The correct answer is All of the choices are correct.

Advantages of a line of credit:

• If the borrowed funds are repaid, then the credit line is still available for future use without having to apply for another loan. You can borrow as many times as you need within the line of credit. Once you repay, the balance increases upto the limit.
• Line of credit is generally unsecured loans and as such banks are taking more risk.
• The interest rate is competitive with other low-cost forms of credit.

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