At times, you may be faced with an unexpected emergency, you may have to welcome a new member to your family or deal with a mini-crisis. If you are a businessman you may need flexibility to access funds to purchase inventory, meet your receivables payments or pay for equipment. Or, you may be presented with a very small time window to utilize an emerging opportunity.
It is at such times that you will appreciate having ready cash to help you meet such contingencies. A ready credit line or line of credit or overdraft, as it may be called, is a product designed to help you at exactly such times. Lets take a look at the main characteristics of a Ready Credit Line and also take a look at a popular credit line product:
What is a Credit Line?
A credit line is a credit facility that allows an account holder of a bank to draw more than what is in their account, up to the credit limit allowed by the bank.
General Characteristics of a Credit Line
The following are a few main general characteristics of a credit line (there may be variations from bank to bank, so check with your bank for exact details) :
▪ A credit line can be availed up to the limit set. Once the availed credit is paid off, the credit limit can be availed over again. It thus becomes a revolving credit facility given to the customer.
▪ Credit lines are generally flexible lines of credit. You may repay as per your convenience (of course, interest will be charged) and as long as you are within the set limits, you may draw multiple times from the line.
▪ Credit lines are available in both secured (against collateral) and unsecured forms. Secured credit lines allow for favorable interest rates for borrowers. You may, usually, avail secured credit against the following assets :
* Fixed Deposits, with the added advantage that you can access cash without breaking the FD, which continues to earn interest
* Pledge of Shares
* Charge on Property
Citi Ready Credit Line
Citibank’s Ready Credit Line is a standby line of credit. It is a pay-as-you-use product, meaning you do not pay for any interest charges and fees unless you use your credit line.
You may use up to 96% (amount used includes both the credit amount and interest/fees charged) of your full credit line that has been approved. Every time you repay in part or in full the amount you have used, your credit line gets automatically restored by that amount. This means that you can draw from your line repeatedly, up to a maximum of 4 installment loans at a time.
To be eligible for the Citi Ready Credit Line, you must be between 25-65 years of age, should be a Filipino resident or local resident foreigner with a valid Philippine billing address, have a minimum annual income of P360,000 and/or must have a credit card (may be from other banks). You would also have to submit a signed application form, two valid photo IDs, ITR / BIR / latest 3 months payslips and a photocopy of the front side of any active credit card (must be active for at least 6 months for a Citi Card and for at least 1 year for cards from other banks).
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