What is an Open Line of Credit Quizlet?

An open line of credit is a type of loan that borrowers can use when they need the money. It works by using the equity in a person’s home as collateral. This is often used in emergencies such as a car break down. An open line of credit may be used for many different purposes, depending on the lender’s policies. While the interest rate may be variable, the total amount is usually fixed, and repayment terms are legally mandated.