Need Help with Line of Credit Information

self

[hsmomx3]

We were recently approved for a line of credit to be used for home improvement/debt consolidation purposes.

Upon signing the papers later this week, they said they would deposit some of the money into our checking account.

Here are my questions:

1. Do they always give you a specified amount upfront? 2. Even though checks for the LOC will not be sent to us for a few weeks, what if we don't want to use this money and we want to pay some of it back? Are we assessed interest right away on this amount?

I'm not sure if I am wording this properly as this is new to me.

If you have any advice, etc. let me know.

Thanks.

[RedBloodedAmerican]

Is it thru a legit bank or one of these "free cash from us" folks?

If it's not a legit bank, like BofA, I am laughing my butt off here. What is your repay percentage?

[hsmomx3]

It's a legit company as we sent thru a mortgage banker where they do not charge a fee.

Interest is low and there were no fees.

[RedBloodedAmerican]

If you ever go to buy a vehicle, give me a jingle, I sell used cars.

[NRA2BFree]

It would depend on what your contract says. The best way to know how, when they are going to pay you and whether there is a "prepayment" penalty or other contract stipulation, is to call them and ask them. You might want to read the fine print on the contract to see what it says about prepayment, if you haven't done that already. Lenders are usually very clear about the terms of their loans.

[politicket]

1. Most lending institutions will require that you take a minimum amount "up front" before they will do business with you (usually in the neighborhood of $20,000).

2. Interest begins accruing on the balance outstanding immediately upon loan payout and is usually amortized over a 30-year period.

3. Unless you have REALLY important needs for the money then it is best to pay it all back immediately (or as soon as the contract allows) since these types of loans are dangerous IMHO. These loans use your HOUSE as collateral, therefore if you default on your loan your house will be foreclosed upon. A house should never be used as collateral for anything other than your primary mortgage.

[hsmomx3]

Okay, I found out that if you don't do this, the financial instit. will charge you a higher int. rate. We can always send back what we don't use but still maintain the LOC account.

The man we are dealing with is not charging us a fee for doing this.