If you have an excellent credit rating, you may be able to qualify for what is known as line of credit loan. These loans are loans that are established and you are given credit within a certain limit, which you can borrow against. As you borrow on the loan the amount of credit available goes down and you pay on the money borrowed it goes up. Credit cards are a type of line of credit loans.
Line of credit loans are good because you are basically approved for the loan before you actually need one then you are free to use this loan whenever the need arises provided you don't go over the limited and pay your loan payments on time. Once the line of credit is established you access the money simply by writing a check and most times you only pay interest on that portion of the credit line you are actually using.
One nice thing about line of credit loans is that once you pay off the loan the line of credit remains open so that if you need another loan in the future you do not have to reapply as the credit and credit limit is already there. Many businesses often carry a line of credit making it easier for them to purchase new equipment they need without always having to wait for a new loan application to be filed, reviewed and granted.
Of course line of credit loans are more difficult to get and usually only given to those people or businesses that have excellent credit ratings and that the financial institution has every reason to believe will be able to make their payments on time. Most line of credits loans are reviewed at specific intervals and may increase or decrease depending on the results of the review.
Lines of credit make sense for those people who need to borrow irregular amounts of money at various times.