Personal Lines of Credit in 2024

Checking rates won’t affect your credit score

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Written by
Carol Pope
Updated July 29, 2024
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Personal line of credit options at a glance

Fifth Third Bank

8.74% - 21.74% (with autopay)

Fifth Third Bank Personal Lines of Credit

Please note that rates are for unsecured personal lines of credit.

$2,000 - $50,000

$65 (first year waived)

Pros
  • Offers secured and unsecured lines of credit
  • Low rates
  • Customer service agents available via live chat
Cons
  • Only available in 11 states
  • Higher annual fee
  • Can’t apply online

What to know

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Fifth Third offers personal lines of credit (PLOCs) with some of the lowest rates around. It charges an annual fee, but this small expense might be worth it depending on the rate you qualify for.

But first, you must live in one of the 11 states where it does business. Also, the smallest line you can get is $5,000. You don’t have to max out your line, but having a lot of unneeded available credit could lead you to overborrow.

How to qualify

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You’ll have to contact Fifth Third to ask about its specific borrower requirements. You can’t prequalify or apply online. However, you can schedule a meeting with a banker either over the phone or in a branch.

You must also live in one of these 11 states to borrow: Ohio, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, South Carolina, Tennessee or West Virginia.

First Tech Credit Union

14.25% - 18.00%

$500 - $25,000

None

Pros
  • Lends in all 50 states
  • Free consultations with finance professionals
  • Easy online application
Cons
  • Must become a member
  • If you don’t meet membership requirements, will need to join an affiliated association
  • Physical branches only in seven states

What to know

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Although it has branches in a handful of states, First Tech Credit Union is primarily a digital lender. You can apply online and get help from a representative virtually, if you need it. Once First Tech approves you, you can manage your PLOC though its highly rated mobile app and an online customer portal.

Since it’s a credit union, you need to join to borrow. And unlike some of its rival credit unions, First Tech has membership requirements to meet before you qualify.

How to qualify

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You can apply before you become a member, but you’ll have to join First Tech to accept your PLOC. To qualify, you need to meet one of the requirements below:

  • Work for a company that partners with First Tech
  • Be related to or live with a current First Tech member
  • Work for the state of Oregon
  • Live or work in Lane County, Oregon
  • Become a member of the the Computer History Museum or Financial Fitness Association (but First Tech will pay your dues for the first year)

KeyBank

14.25% - 18.75% (with autopay)

KeyBank Preferred Personal Line of Credit

Please note that rates, loan amounts and fees apply to KeyBank’s Preferred Personal Line of Credit.

$2,000 - $25,000

None

Pros
  • Offers small lines starting at $250
  • Live chat seven days a week
  • Financial hardship programs available in case you can’t pay
Cons
  • Only available in 15 states
  • Comes with checks but no card
  • Must visit a branch to apply if you’re not already an account holder

What to know

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Whether you need a large line of credit or a small one, KeyBank could be a solid choice. You can borrow up to $25,000 with KeyBank’s Preferred PLOC. But if you only need a little, consider KeyBasic. This PLOC has line amounts from $250 to $5,000, with annual percentage rates (APRs) between 17.25% and 24.25%.

After it approves you, KeyBank doesn’t issue a debit card so you can access funds. Instead, you’ll only get checks. Not all places take checks, and even if they do, writing out checks can be inconvenient.

How to qualify

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You must have a credit score of 780 or higher (and enroll in autopay with a KeyBank account) to get its lowest APRs. You must also be at least 18 years old and a U.S. citizen to qualify.

KeyBank is only available in Alaska, Colorado, Connecticut, Idaho, Indiana, Maine, Michigan, New York, Ohio, Oregon, Pennsylvania, Utah, Vermont and Washington.

PNC Bank

16.25% - 22.55% (with autopay)

$1,000 - $25,000 ($5,000 in California)

$50

Pros
  • 0.25% APR discount for autopay
  • APRs will never exceed 24.00%
  • Can switch devices in the middle of a live chat
Cons
  • Not available in all states
  • No online applications
  • Charges annual fee

What to know

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PLOCs have variable rates. Variable rates go up and down with the market, so they can be risky in a volatile economy. PNC personal lines of credit offer some peace of mind by capping APRs at 24.00%.

Excellent-credit borrowers might want to keep their options open, though. PNC’s minimum APR isn’t the lowest, so you might find better rates elsewhere.

How to qualify

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PNC states that its lowest rates go to “well-qualified applicants,” but it doesn’t elaborate further. Generally, you need at least good credit to qualify for a PLOC and a score well into the 700s to get the best rates.

PNC’s PLOCs are available in about half the country. See if your state is eligible by visiting its website.

Regions Bank

13.50% - 26.50%

Regions Personal Line of Credit

Please note that APRs and line amounts apply to Regions’ unsecured personal line of credit.

$500 - $50,000

$50

Pros
  • Could qualify for secured line of credit with bad or no credit
  • 10-day grace period before $39 late payment applies
  • Autopay discount of up to 0.50%
Cons
  • Only available in 15 states
  • Must be a Regions account holder for at least six months to qualify
  • Only offers autopay discount on lines $5,000 and higher

What to know

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Regions offers two types of lines of credit: secured and unsecured. A secured PLOC requires collateral which, in this case, is your savings account.

Regions encourages its credit-limited borrowers to consider a secured PLOC. These are easier to qualify for and you can improve your credit with on-time payments. Still, secured PLOCs can be risky. If you can’t pay, Regions will recoup its losses by seizing what you owe from your savings account.

How to qualify

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You can’t apply for a Regions PLOC unless you’ve been an account holder for at least six months. Once you’ve met this benchmark, you can apply online, over the phone or in person for an unsecured PLOC. To get a secured PLOC, you must apply at a branch.

You have to live in one of the following states to bank (and borrow) with Regions: Alabama, Arkansas, Florida, Georgia, Iowa, Illinois, Indiana, Kentucky, Louisiana, Missouri, Mississippi, North Carolina, South Carolina, Tennessee and Texas.

U.S. Bank

12.50% - 22.50%

Up to $25,000

None

Pros
  • Provides a card to access funds
  • Can check rates without hurting your credit score
  • Available in all 50 states
Cons
  • Must speak with a banker if you’re applying with another person
  • Limited brick-and-mortar locations
  • No autopay discounts

What to know

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Of all the lenders on this list, U.S. Bank is probably the most accessible. It offers PLOCs nationwide over the phone and online. You can pay with your line by card (many lenders only issue checks). And perhaps most notably, you can prequalify without hurting your credit score.

At the same time, U.S.Bank might not make sense if you prefer a face-to-face experience. It does much of its business virtually (unless you’re lucky enough to live near a branch).

How to qualify

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It’s hard to get U.S. Bank’s lowest rates — you have to have a credit score of at least 800. But to generally qualify, it only requires 680. You must also have a current U.S. Bank checking account with no recent overdrafts.

What is a personal line of credit?

A personal line of credit is a type of financing that you can borrow from over and over again. You must stay within your credit limit, and paying back what you owe frees up credit that you can borrow from again.

In this way, personal lines of credit are similar to credit cards — both are a type of revolving debt. This is also called open-end credit. You usually need to have at least good credit to qualify for a PLOC.

What’s the difference between open-end and closed-end credit?

An open-end credit transaction allows you to continuously borrow money up to a predetermined limit. You only have to repay what you borrow. Personal lines of credit, credit cards and HELOCs are examples of open-end credit.
 
A closed-end credit transaction provides a lump sum of money up front. Then you’ll repay that lump sum in installments over a certain period of time. Installment loans (like personal loans, auto loans and mortgages) are examples of closed-end credit. 

How does a personal line of credit work?

Many personal lines of credit have a life cycle with two stages: the draw period and the repayment period. These stages usually last three to five years each.

  • Draw period: Think of your draw period as your borrowing period. Here, you’ll use a specific card or checkbook to draw from your line of credit. During this time, you’ll also make minimum monthly payments.
  • Repayment period: When you hit your repayment period, you will no longer be able to borrow. Instead, this is the time you’ll pay back your outstanding balance.

You can usually borrow between $1,000 and $50,000 with a PLOC. Your lender might also have a minimum draw amount. For example, you might not be able to draw less than $50 at a time.

Instead of the draw/repayment period model, some PLOCs only have a draw period. In these instances, your outstanding balance might be due in full once your draw period is over. Or you might have a continuous draw period, depending on your lender. These PLOCs work like a credit card (you can borrow as long as you make your minimum monthly payments and stay within your credit limit).

Personal line of credit interest rates

On a personal line of credit, you pay interest on what you borrow, and interest accrues immediately. The APR is usually variable, which means it can fluctuate each month. This differs from fixed interest rates, which stay the same for the duration of your loan term.

Variable interest rates are guided by the Wall Street Journal prime rate.

The Wall Street Journal prime rate (also called the U.S. prime rate) is the average interest rate that most lenders charge their most creditworthy customers. This rate tends to fluctuate based on the Federal Reserve rate, but not always.

To illustrate this, let’s say you see a PLOC with a starting APR of prime plus 5.00%. Also imagine that the prime rate is 8.50%. That means borrowers with the best credit could get a minimum APR of 13.50%, or 8.50% plus 5.00%.

Personal line of credit fees

Each lender sets its own fees on personal lines of credit. As you read the fine print, keep an eye out for extra charges such as:

  • Origination fee: Some lenders tack on this upfront fee to cover credit underwriting and application processing.
  • Application fee: Application fees aren’t common, but they are possible. Skip lenders that charge you to apply.
  • Late payment fee: Many lenders charge a fee for making late payments. Check to see if the lender has a grace period — some might only consider you late if you are 10 or more days behind.
  • Over limit fee: An over limit fee could apply if you borrow past your credit limit.
  • Annual or monthly fee: You may need to pay a maintenance fee every year (or month) that your line of credit is open.
  • Transaction fee: Sometimes called a draw fee, this means some lenders may charge you to access your line of credit. Keep this in mind when deciding if a personal line of credit is your best option.

Personal line of credit pros and cons

ProsCons

 Flexible. Only borrow what you need, and only pay interest on what you borrow.

 Competitive rates. PLOCs tend to have lower interest rates than credit cards.

 Future funding. A line of credit can be helpful for long-term projects with no set end date.

 Not everyone qualifies. In most cases, you need to have good to excellent credit to get a PLOC.

 Fluctuating monthly payments. Your monthly payments depend on variable interest rates and how much you draw.

 Fees. Between annual fees and transaction fees, PLOCs can get expensive.

 Interest. Interest accrues as soon as you draw from your PLOC.

How can you use a personal line of credit?

You can use a personal line of credit for nearly anything. In particular, this type of funding can be a helpful way to tackle ongoing expenses. These could include home improvement or medical bills related to a chronic illness.

If you’re juggling multiple credit card bills and you have strong credit, you could also use a PLOC for debt consolidation.

Many banks also offer a personal line of credit as overdraft protection. In this scenario, your bank will charge overdrafts to your line of credit, bypassing overdraft fees. You will, of course, have to pay the charge back, plus interest.

How to get a personal line of credit

Getting a personal line of credit follows a similar process to getting other types of loans.

  1. Check your credit score

    First, check your credit score for free using LendingTree Spring. An unsecured personal line of credit requires a credit score of at least 680, generally speaking. If your score needs some work, you may want to seek out an alternative form of funding.
  2. Review your budget

    A personal line of credit doesn’t have a set borrowing limit. At least, not in the traditional sense. As long as you’re in your draw period, within your credit limit and making minimum monthly payments, you can borrow.

    Even so, it’s helpful to know about how much money you’ll need on a rolling basis. This can help you avoid taking on unnecessary debt.
  3. Research lenders

    Check with your bank or credit union to see if it offers personal lines of credit. If it does, start there.
    But that’s not where your search should end. Research other banks and credit unions that offer personal lines of credit, and compare their features. Pay special attention to APRs, fees and customer service reviews.

    Normally, you would prequalify to compare offers, but prequalification isn’t usually possible on lines of credit.
  4. Apply for your line of credit

    Once you’ve narrowed down the personal line of credit that best aligns with your needs, it’s time to apply.

    If you’re borrowing from a new-to-you bank or credit union, your first step will be to join. Some banks (like Regions) require that you be a member for a certain amount of time before you can borrow. If not, you can apply for your line of credit.
  5. Start borrowing

    Once the lender approves you, it may send you a card or a checkbook so you can access your line of credit. Your first repayment is usually due about 30 days after you start drawing.

Can you get a personal line of credit with bad credit?

Some lenders specialize in PLOCs for bad credit, so you might qualify with a low score. However, that doesn’t mean that rates will be affordable. On top of higher-than-average interest, bad-credit PLOCs can come with draw fees as high as 10.00%. Traditional banks and credit unions usually require a FICO score of at least 680 (sometimes higher).

If you still think that a PLOC is your best option, you could consider securing it with a savings or investment account. Secured loans and lines of credit can be easier to qualify for since the lender can repossess your collateral if you don’t pay.

Personal line of credit alternatives

 Personal loan

Personal line of credit vs. personal loan

A personal loan may be best if you need a lump sum of cash rather than a stream of funds. If you have a one-time need for money and know how much that will be, a personal loan may be for you.

A personal loan will give you a lump sum of money that you will pay back in monthly installments, plus interest. Like lines of credit, most personal loans are unsecured. Unlike lines of credit, personal loans come with fixed interest rates.

You can get a personal loan from a wide variety of lenders. Loans from brick-and-mortar banks tend to be best for good-credit borrowers due to stricter eligibility requirements. It’s usually easier to qualify for online loans, but they typically have higher APRs.

 Credit card

Personal line of credit vs. credit card

Compared to credit cards, a personal line of credit may be better for large, infrequent purchases. Groceries, gas and other everyday purchases make more sense for credit cards, especially if you earn cash back rewards and pay your bill in full each month.

Interest rates may be lower on a personal line of credit, but that doesn’t mean they are always less expensive. Credit cards come with a built-in grace period. You won’t have to pay interest as long as you pay your balance in full every month.

Also, some lenders charge a transaction fee every time you draw from your PLOC. These fees don’t apply to credit cards.

 HELOC

Personal line of credit vs. HELOC

Due to generally lower interest rates, you might consider a HELOC over a personal line of credit. But that’s assuming you’re a homeowner and you are certain you can pay back what you borrow.

A home equity line of credit (HELOC) is like a personal line of credit, with one major difference. HELOCs use your home as collateral. Since a HELOC is secured, it usually carries a lower interest rate than unsecured personal lines of credit.

HELOCs can be risky. If you don’t pay back your HELOC, the lender can foreclose on your house. HELOCs also usually come with closing costs that can range from 2% to 5% of your HELOC limit.

Frequently asked questions

A personal line of credit works sort of like a credit card. The lender gives you a credit limit, and every time you borrow, you use up some of your credit line. When you pay it back, that credit becomes available for you to borrow from again.
 
You can use a personal line of credit for almost anything, but they make the most sense for ongoing, infrequent expenses. Examples here could be home repairs or medical bills. You could also open a personal line of credit as a financial safety net in case of emergencies.

It can be hard to get an affordable personal line of credit if your credit score is below 680. Instead, you might want to consider a credit card for bad credit. Just pay your balance in full each month so you can avoid paying interest.

It might be, but no loan, credit card or line of credit is a good idea for everyone in every circumstance. If you have strong credit and need to borrow more than once over a period of time, a PLOC might be the tool for you.