Signature line of credit
Encyclopedia
A signature line of credit is a revolving line of credit
that is not backed by collateral; i.e., the sole criterion for the decision to grant the loan and establish the terms thereof is an assessment of the customer's credit rating. Also known as an "unsecured line of credit".
Revolving credit
Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Examples of revolving credits used by consumers include credit cards. Corporate revolving credit facilities are typically used to provide liquidity for a company's day-to-day...
that is not backed by collateral; i.e., the sole criterion for the decision to grant the loan and establish the terms thereof is an assessment of the customer's credit rating. Also known as an "unsecured line of credit".
See Also
- CollateralCollateral (finance)In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan.The collateral serves as protection for a lender against a borrower's default - that is, any borrower failing to pay the principal and interest under the terms of a loan obligation...
- Line of CreditLine of creditA line of credit is any credit source extended to a government, business or individual by a bank or other financial institution. A line of credit may take several forms, such as overdraft protection, demand loan, special purpose, export packing credit, term loan, discounting, purchase of...