 TITLE: What to Do if Your Personal Credit Line Is Closed CONTENT: Similar to a home equity line of credit (HELOC), a personal line of credit lets you borrow money from a pool of available funds at any time during what's known as the \"draw period,\" which lasts several years. You pay interest only on the cash you actually borrow, not your entire borrowing limit. By contrast, a personal loan provides a lump sum of cash that you begin repaying (and paying interest on) right away.\nYou can use money from a personal line of credit for many purposes, such as consolidation of high-interest credit card debt, a home improvement project or a vacation. Once you've paid back any cash you've borrowed, the full amount of money authorized under a personal line of credit once again becomes available.Personal lines of credit are frequently used to fund big-ticket purchases, while people often turn to credit cards for smaller purchases. Interest rates on personal lines of credit tend to be lower than interest rates on credit cards, especially for borrowers with good credit scores. END