Revolving Line of Credit

Written by True Tamplin, BSc, CEPF® | Reviewed by Editorial Team

Updated on December 13, 2022

A revolving line of credit is a line of credit with funds that can be spent again once repaid. Most lines of credit, such as personal lines of credit, home equity lines of credit (HELOCs) and credit cards are revolving. Interest is only accrued on the funds that you actually spend.

Revolving Line of Credit Definition

A non revolving line of credit is essentially a loan. You get a specific amount of money, and you generally pay a fixed interest rate with regular monthly payments. Once the funds have been spent, the money is gone. Examples of non revolving lines of credit are student loans and mortgages.

Is a Credit Card a Revolving Line of Credit?

Yes, a credit card is a revolving line of credit. The term revolving means that once you have paid back the funds you spent, you can spend them again. Most lines of credit are revolving, including personal lines of credit and home equity lines of credit (HELOCs).

Revolving Line of Credit FAQs

What is a line of credit?

A line of credit is money lent to an individual or business. If a line of credit is revolving, then the line of credit will replenish as the borrower pays back money borrowed.

What does LOC stand for?

The acronym LOC stands for Line of Credit.

What is a revolving line of credit?

A revolving line of credit is one which replenishes when the loan is paid off. An example of this is a credit card. A non-revolving line of credit closes once the loan is paid off, such as a student loan.

What's the difference between a line of credit and a loan?

A loan is typically a lump sum whereas a line of credit is typically revolving which allows for the borrower to draw, repay, and again draw as needed.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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