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A line of credit is a pre-approved loan authorization with a specific borrowing limit based on creditworthiness. A line of credit allows borrowers to obtain a number of loans without re-applying each time as long as the total of borrowed funds does not exceed the credit limit.
Line of Credit Example
In banking, a line of credit is an agreement by a financial institution such as a bank to extend credit up to a certain amount for a certain time to a specified borrower.
