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If you have regular borrowing needs that can't be covered by a credit card, but aren't sure how much you'll need for a term loan, a flexible personal line of credit might be the answer for you.

The trick is to figure out which banks offer personal lines of credit. While there are lenders across the country that offer personal lines of credit, some larger institutions, such as Wells Fargo, no longer offer this particular service.

To help you find the best personal lines of credit for your situation, we've compared over a dozen of them and picked our three favorites. Read on to see why we chose these as the best line of credit providers available, as well as some details on how this type of debt works.

Plus:

Best unsecured personal line of credit: KeyBank

Consider this if you don't want to risk collateral but still want a reasonable interest rate.
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KeyBank provides a relatively tight range of rates for its standard unsecured credit line, starting from 10.74% - 15.99%. While KeyBank’s isn’t necessarily the lowest unsecured rate offered, KeyBank’s listed 15.99% upper limit could help unsecured borrowers with moderate credit scores establish a reasonable ceiling on their interest rates, making it one of the best personal lines of credit in our opinion.

Additionally, KeyBank offers an unsecured small-dollar line of credit for up to $5,000. To apply with KeyBank, you must open an account with the bank and live near a branch in one of the following states: Alaska, Colorado, Connecticut, Idaho, Indiana, Massachusetts, Maine, Michigan, New York, Ohio, Oregon, Pennsylvania, Utah, Vermont or Washington.

Unsecured lines of credit won’t offer the lowest rates available, but they are a good option for borrowers with solid credit profiles who lack collateral. Borrowers who aren’t able to qualify on their own can also obtain a cosigner or co-applicant.

Drawbacks: Like other regional banks, KeyBank isn’t widely accessible to all interested applicants. If KeyBank proves not to be an option for you (geographically or otherwise), have a look at the other options below.

Best secured personal line of credit: Regions Bank

Consider this if you want the lowest rates and greatest flexibility on your line of credit.
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Regions Bank is our top pick for the best non-home-equity secured line of credit provider because of its low APRs, flexible terms and wide accessibility. The lender provides the tightest APR range of any secured line of credit provider — between 7.5% and 8.5% — and it allows you to renew your credit line annually, with no limits on the number of renewals.

Secured credit lines can be opened with as little as $250 or as much as you’re willing to deposit into your account (up to a maximum of $100,000). You also have the option of securing your line of credit with a Regions CD account, savings account or money market account; notably, it even allows applications from non-U.S. citizens. Regions also holds accreditation from the Better Business Bureau.

A secured line of credit is a great option for borrowers with blemishes on their credit records. It allows borrowers to secure low interest rates on their lines of credit while increasing their likelihood of approval. However, lenders will have the right to repossess the collateral, should you fail to pay your debts.

Drawbacks: Borrowers living outside Region’s 15 states of operation will have difficulty obtaining a credit line, as line of credit applications require a branch visit.

Best personal line of credit for bad credit: PenFed

Consider this if you have poor credit and want the best chance of getting approved.
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Pentagon Federal Credit Union (PenFed) is our top choice for lines of credit for borrowers with bad credit scores. PenFed and other credit unions are usually more willing to work with poor-credit members to structure appropriate financing terms.

Joining is easier than you think: Membership with PenFed is open to anyone willing to open a savings account with just a $5 deposit. As a credit union, its annual percentage rates (APR) on all loans and lines of credit are capped at 17.99% — unlike most banks, which may charge more. PenFed members with low credit scores may strengthen their applications by obtaining a cosigner.

The 14.65% rate on PenFed’s line of credit may be higher than that for many of its competitors, but it has the benefit of being a fixed rate, which isn’t always available elsewhere. This ensures that your rate will not change for as long as your line of credit remains in use. Interested applicants must join PenFed to apply.

Drawbacks: Lines of credit are typically reserved for customers with better credit histories and scores, so applicants with PenFed may still be rejected. For borrowers who don’t want to join a credit union, or those who don’t qualify with PenFed, we also recommend trying KeyBank above: It doesn't list explicit credit requirements and allows cosigners and co-borrowers.

Summary of our top picks

For a quick comparison, we summarized our best companies for personal lines of credit in the following table. For more details on how we evaluated each provider, see the methodology section below.

Best for…
Lender
APRs
Loan Amounts
Unsecured line of creditKeyBank10.74% - 15.99%$2,000 - $50,000
Secured line of creditRegions Bank7.50% or 8.50%$250 - $100,000
Bad creditPentagon Federal Credit Union14.65% - 17.99%$500 - $25,000

What is a personal line of credit? Here are the details

A personal line of credit is a type of account you can get through a lending institution, such as a bank or credit union, which allows you to borrow from it at will.

These accounts are typically unsecured (meaning you don’t need collateral), and they often have a borrowing limit and require high credit scores. If you have a solid credit profile, you may be eligible for interest rates through your personal line of credit that are lower than what many credit cards offer.

Like a credit card, a personal line of credit is a revolving loan: You borrow the mone and pay back the amount along with the interest, then your credit gets replenished for the next time you need to borrow from your line of credit.

How to get a personal line of credit

To apply for a personal line of credit with a lender, you’ll usually need to have the following documents at the ready, as well as an eligible credit score.

  • Proof of income/employment: Lenders will want to know whether you can afford to pay off a loan and will want to take a look at your income. If you’re unemployed, you may be able to provide other proof of income, such as child support, alimony, Social Security or your spouse’s wages in order to prove to lenders you have the resources to pay back a personal line of credit.
  • Financial history and standing: Aside from your income and credit score, many lenders will also want to see additional financial information, such as whether you have a history of paying your bills on time and how high your debt-to-income ratio is. Like with proof of income, lenders will want to know if you can afford to take on new debt.
  • Credit score and history: To qualify for a personal line of credit, you’ll typically need to have a credit score of at least 690, as well as a solid profile with no defaults or other issues. Remember, the higher your score, the better the interest rate you could qualify for, so you may want to work on improving your credit score if you’re worried about being approved for a personal line of credit.

Pros and cons of personal lines of credit

Opening a personal line of credit, like most financial decisions, comes with both benefits and downsides. This chart summarizes some of the pros and cons you may face with a personal line of credit.

Pros

  • May draw up to 100% of credit limit without restrictions Non-deductible interest expense
  • Interest incurred only on funds borrowed Most have variable rates, so if interest rates increase, the cost for the line of credit also rises
  • Flexible repayment options Annual/monthly maintenance fees regardless of use
  • Lower average APR than credit cards Often has higher rates than fixed-rate loans; not ideal for debt consolidation
  • Unsecured credit lines risk no collateral, but collateral can be used to get lower interest rates via a secured credit line Requires a good credit score to qualify, and a persistently high balance can decrease your credit score

Cons

  • May draw up to 100% of credit limit without restrictions Non-deductible interest expense
  • Interest incurred only on funds borrowed Most have variable rates, so if interest rates increase, the cost for the line of credit also rises
  • Flexible repayment options Annual/monthly maintenance fees regardless of use
  • Lower average APR than credit cards Often has higher rates than fixed-rate loans; not ideal for debt consolidation
  • Unsecured credit lines risk no collateral, but collateral can be used to get lower interest rates via a secured credit line Requires a good credit score to qualify, and a persistently high balance can decrease your credit score
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Personal line of credit eligibility and rates

In order to receive good rates, you’ll need to demonstrate to potential lenders that you have a strong credit score and history. The following chart outlines common terms and rates you may find with a personal line of credit, based on our reviews of different lenders.

Average Interest Rates
Variable range 9.30% - 17.55% (based on prime rate, as of July 30, 2021)
Term Range6 months - 5 years (or flexible)
Credit Limit Range$1,000 - $100,000
Average Fees
  • Annual maintenance fee: $25 - $50
  • No check processing fee
  • No prepayment penalty
  • Late payment fee: $32 or ~7.5% of monthly payment past due
  • Returned payment fee: $25 - $39
Repayment ScheduleMonthly

Where to shop for a personal line of credit

If your bank offers credit cards and checking accounts, you may also be able to apply for a personal line of credit via your local branch. Many local and regional banks are also able to provide personal lines of credit to existing customers.

Since personal lines of credit are a revolving credit, you’re less likely to find them offered by many online lenders. Instead, the market for credit lines is generally dominated by big banks and credit unions, entities with sufficient capital to sustain a revolving credit service. Our selection of providers above does not encompass every line of credit provider within the U.S., but it can be used as a guide for comparison shopping.

And of course, you could always turn to personal loans if lines of credit aren’t a good fit for you.

Our methodology

We evaluated over a dozen lines of credit products to find the best personal lines of credit. In our review, we considered the following criteria:

  • Competitive APRs: Personal lines of credit come in secured and unsecured formats. Due to the inherent risk factors involved in unsecured revolving credit, many lenders will charge higher rates on lines of credit than installment loans.
  • Range of loan amount and terms: Most personal lines of credit are structured in cycles where the APR adjusts monthly with the prime rate. Some lines may also be divided into separate spending and repayment periods. We evaluated the amount of flexibility each lender permitted in their loan amounts and term lengths.
  • Fees: Many lenders charge an annual maintenance fee. Other lenders charge prepayment penalties in addition to separate processing fees. We evaluated this factor based on the size and prevalence of incidental charges.
  • Lender accessibility: Many banks do not allow noncustomers to open a personal line of credit. This limits access to many lenders depending on where you bank. We graded this factor based on the eligibility requirements and lender locations. Some lenders may allow you to complete the entire application process online.
  • Lender credibility: We reviewed outstanding complaints filed under each lender through the Better Business Bureau as well as the reputation of the company itself. Ratings of "NR" may indicate that details related to the business were being updated as of the time of our review, or that the company was delisted as a result of BBB internal policies.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.