What is the risk of a line of credit?

A line of credit can be an excellent financial tool for those who are in need of emergency funding. However, it also comes with some risks, such as high-interest rates and fees.

A line of credit can be risky if it’s not managed properly. There are several things to consider when determining the risk level associated with a line of credit, such as the length of the loan term; the amount borrowed; the collateral used to secure the loan; and the rate of interest charged on the debt.

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