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Can I apply for a Line of Credit and not use it?

Regular Contributor

Can I apply for a Line of Credit and not use it?

Just curious... Thinking about buying a motorcycle and doing it this way. Unless the rates are ridiculous!
5 REPLIES
Frequent Contributor

Re: Can I apply for a Line of Credit and not use it?

I have two Personal Lines of Credit. One from Wells Fargo, 10k, and the other from Pen Fed 20k.

 

the Pen Fed is just under 11% and wells is similar.

 

I think the purpose of LOC is when you need it, use it, but pay it back.  From my history, they don't like it when you carry a balance.

 

Again, use, pay, don't use for a few months, then use, pay and repeat.

 

The interest is very small when using it for a few thousand and then pay back in a week or two.

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Epic Contributor

Re: Can I apply for a Line of Credit and not use it?

My partner has a $16,200 Line of Credit With Wells Fargo that just past 1 year, I know because I saw the $25 AF post on Mint and he has NEVER used it.

He also opened a NavCheck with Navy for $15k a few months back that we have not used as of today.

Depends on bank and if you bank with them and rather I think you can have it sit open and never use and have it not close... I use to have a line of credit through a Credit Union for $15k but it was only open to draw from for 1 year then at that point in time was "locked" and was a 5 year repay of what ever the balance was... If you were not using all $15k or if you didn't have that much to begin but wanted to go up to $15k or see about opening up for more draw as you paid down you had to reapply otherwise it just stayed locked until paid off.


 

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Valued Contributor

Re: Can I apply for a Line of Credit and not use it?

of course you can. 

 

depending if the interest is good for you or not though. i believe its 12% on 10k-20k at my bank. of course you wouldnt need too use it all. 

are you buying used or new? the dealerships may have a lower rate. 

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Regular Contributor

Re: Can I apply for a Line of Credit and not use it?


Bay_Area_Joe wrote:

I have two Personal Lines of Credit. One from Wells Fargo, 10k, and the other from Pen Fed 20k.

 

the Pen Fed is just under 11% and wells is similar.

 

I think the purpose of LOC is when you need it, use it, but pay it back.  From my history, they don't like it when you carry a balance.

 

Again, use, pay, don't use for a few months, then use, pay and repeat.

 

The interest is very small when using it for a few thousand and then pay back in a week or two.


Why don't they like it when you carry a balance? I'm thinking of getting one.

Valued Contributor

Re: Can I apply for a Line of Credit and not use it?


Bsong wrote:
Just curious... Thinking about buying a motorcycle and doing it this way. Unless the rates are ridiculous!

I've had a LOC on my house for years and I've yet to use it or need it (knock-on-wood).

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