​A line of credit is a type of financial arrangement that allows an individual or business to borrow money up to a predetermined limit. It is a flexible borrowing option that enables the borrower to access funds as and when they need them, rather than receiving the entire loan amount upfront. Lines of credit typically have a variable interest rate, which means the cost of borrowing may fluctuate over time. Unlike a traditional loan, a line of credit does not have a fixed repayment schedule, and the borrower is only charged interest on the amount they borrow. This makes it an attractive option for those who require periodic access to funds, such as businesses that experience seasonal fluctuations in cash flow or individuals with irregular income.