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A wise guide to…

How You Get a Credit Line Loan

If you’re trying to get a credit line loan, you’re no doubt aware of how stressful and confusing the process can be. Don’t worry, though - we’re here to help. In this article, we’re discussing the key points you need to consider when applying for a credit line loan. Our aim is to ensure you can find a loan quickly and easily. Read on to find out more.

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Representative 99.8% APR (fixed). Representative example: If you borrow £500 over 52 weeks at a Representative rate of 99.8% APR and an annual interest rate of 99.8% (fixed), you would pay 52 monthly instalments of £13.41. The total charge for credit will be £197.32 and the total amount payable will be £697.32.
Choose Wisely is a trading style of Choose Wisely Limited and is a free to use price comparison website. Choose Wisely Limited is authorised and regulated by the Financial Conduct Authority as a credit broker not a lender, firm reference number 730574 and is registered with the Information Commissioner’s Office number Z3106681.

A quick, easy way to get a credit line loan today.

  • Borrow from £300 to £10000.

  • Choose between lenders who have accepted your application.

  • Absolutely no fees, ever.

Representative 49.7% (variable).

How to get a credit line loan in 3 simple steps.

Affordability assessment.

1 form - takes 2 minutes to complete and your data is 100% secure.

Compare products.

Choose from lenders that have accepted your application.

Speedy finance.

If approved, the cash can be in your account in as little as 15 minutes.[†]

Table of contents

Written by Inez Miedema
Read time: ~5 mins
Published: 11th March 2020 Updated: 11th March 2020

What are credit line loans?

Let’s start with the basics. Credit line loans, or credit facility loans as they’re also known, are a set sum of money that a bank or credit card company agrees to lend to their customer, when that person needs it. The most common examples of credit line loans in the UK include a spending limit on a credit card or a debit card’s agreed overdraft.

How do line of credit loans work?

Customers who want to access credit line UK products, will first have to apply for credit with their bank, credit card provider or specialised bad credit lender. Once the lender accepts the application, a small amount of agreed credit will be made available directly attached to your UK bank account or a lender specific account. In other words, a pot of money will be made available for you to dip into if and when you need it.

Each month you can pay off the credit in full, or do it in small portions. You will be charged interest on top of your repayments - interest is a percentage cost or fee set by the individual lenders. Charges only occur when the credit line or overdraft is used.

How to apply for a credit line?

Once you’ve chosen a suitable lender who’s accepted your Choose Wisely loan application, getting your hands on a UK credit line in the UK can be as simple as following these 4 steps:

  • Apply online

    Pick a lender, then complete their online application journey which might include creating a profile in order to move forward. All lenders on Choose Wisely are authorised by the Financial Conduct Authority (FCA), this ensures that you are protected by rules outlined by the FCA - avoiding scams and loan sharks.

  • Choose your desired amount of credit

    Based on your circumstances, it’s now time to select how much money you’ll need to have available to borrow.

  • Transfer the money to your account

    If you’re using your bank overdraft, you won’t need to do this. However, if you’re getting a line of credit loan from an external lender, you’ll most likely need to transfer the money or attach the line of credit to your bank account before you can use it. Instead of being given a fixed sum like you would with a loan, a line of credit enables borrowers to dip in and out of funds as and required, only paying interest on what they borrow.

  • Repay the credit

    Finally, repay what you spend. You can do this all at once, or make repayments in small chunks if it makes it more manageable for you. However, to avoid potentially high-interest charges, it’s always best to pay it off as quickly as you can.

How to get an overdraft with bad credit?

Getting a bank account with an overdraft with bad credit isn’t always easy but there are specialised lenders, who aim to give everyone an equal chance. A bad credit overdraft at such a lender is often more affordable than conventional payday loans.

Just like any other way of borrowing money, the first step is applying for overdraft loans. The lender will then decide whether to lend to you based on factors such as borrowing history, available income and credit record.

Who provides credit line loans?

The majority of classic highstreet banks (Barclays, Lloyds, HSBC) and challenger banks (Starling, Monzo, Tide) offer overdrafts but the costs, terms and repayment periods can vary wildly between them and depend on an individual’s financial situation.

For example, it might be harder to get a credit line loan in the UK from Monzo or Barclays with a history of poor credit. In this situation, your best bet could be specialist lenders such as SafetyNet Credit and Drafty. These lenders look at more than your credit score when deciding your eligibility to access credit. That’s why they could be a good starting point for credit line loans uk.

What is the difference between a loan and a credit line?

Good question. Although they share several similarities, there are also a number of key differences between the two.

With a standard loan, a lender will offer and send the customer a predetermined amount of money upfront. Credit lines, however, allow people to borrow only what they need, when they need it.

For example, if you’ve taken out a loan and realise you need more money, you’ll have to take out an additional loan on top of the one you already have. With a credit line, the most you might need to do is request the lender to increase the amount of credit.

So, for those planning on borrowing a set large amount who don’t think they’ll need more, a loan could be the better option. However, for those looking to borrow 50 pounds who can see themselves needing to borrow 100 a short time down the line as a top-up, a credit line loan might be more beneficial.

Get the right payday loan

For more information on payday lenders and how to get accepted for a payday loan, read this wise guide.

Take Control of Your Financial Success - When it comes to money, we believe everyone deserves a fair chance. Find the best option for you with Choose Wisely now and get accepted today.

Credit Line FAQ's

Credit card vs credit line - what’s the difference?

A credit card is a physical card that you can use to make purchases. A credit line enables you to draw funds and transfer them to your bank account, when you need it. Those funds can then be accessed by making a debit card payment or by setting up an online transfer to pay for bills, for example. A credit line is therefore closer to an overdraft.

Do you run a credit check when I apply for a line of credit?

When comparing lenders on Choose Wisely some direct lenders might soft search your credit history, in order to tell us if they accept your application in principle. This won’t leave a mark on your file. Once you apply with the lender of choice, they will do a hard credit search which leaves a mark on your credit record.

Do I need a debit card to access a credit line?

Most lenders will demand you have an active bank account and debit card as this will give them the option to facilitate automatic repayments - if you opt into that. It also helps the lender to decide on your eligibility and helps to prevent fraud as they can see if the account is active.

Written by
Inez Miedema
CMO & Take Control Author at Choose Wisely

Inez came on board in the Summer of 2019. Her main focus has been helping as many people as possible find our website through online marketing, writing content and partnership deals. She boasts 6 years of FinTech experience with other brands and has an in-depth knowledge of our customers.

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Important Information.

All of the information in this guide is correct at the time of writing.

Rates shown are quotes based on your personal circumstances, are subject to status and are available to those aged 18 and over. Rates available range from a minimum of 3.9%APR to a maximum of 1575%APR Representative and loan repayment periods range from 3 to 60 months.

[*][†] Once accepted, your loan can be transferred to you in as little as 15 minutes. The time that it takes for the loan to show in your bank account will depend on your lender and your bank.

If you need financial advice you can visit stepchange, speak to citizens advice, call the national debtline or speak to moneyadviceservice.org.uk.

If you've been declined, please refer to your credit report to gain an understanding of why before making further applications.
Your score can be accessed for free via any of the main credit reference agencies such as Credit Karma, Clearscore or Experian.