A revolving line of credit works differently from a traditional loan. Instead of receiving a lump sum, you are given a credit limit that you can draw against as needed.
How It Works:
- Approval: You are approved for a maximum credit limit based on your financial profile.
- Draw Funds: Transfer money from your line of credit to your RMO checking or savings account through MyRMO whenever you need it. You can draw any amount up to your available limit.
- Interest: You only pay interest on the outstanding balance you have drawn, not on the total credit limit. Interest accrues daily on the balance.
- Repayment: Make at least the minimum monthly payment. As you repay, that amount becomes available to borrow again.
- Revolving Access: The line remains open and available as long as your account is in good standing, so you do not need to reapply each time you need funds.
Example: You have a MyLine with a $10,000 limit. You draw $3,000 to cover a home repair. You only pay interest on the $3,000. After you repay $1,000, your available credit goes back to $8,000.
Common Uses:
- Emergency fund backup
- Home improvements or repairs
- Managing irregular income or expenses
- Overdraft protection when linked to your checking account
To learn more, log in to MyRMO or schedule an appointment through MyRMO or by calling us to speak with an Expert.