Business and Personal Finance Dictionary

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• REVOLVING LINE OF CREDIT
  
  A type of credit facility. A term that can be confusing, with different banks using the term to describe different types of credit facilities. 1. In some banks, "revolving line of credit" refers to a credit facility that permits the borrower to draw down and/or repay amounts up to a specified maximum at any time. Called a line of credit by other banks. 2. In other banks, the name "revolving line of credit" is used to distinguish between "regular lines of credit," (situations in which the bank is not legally committed to make advances) and "revolving lines," (situations in which the bank is legally committed to make advances.) This usage is outdated, wrong, and might expose the bank to legal liability. 3. Large banks, primarily, use the term to refer to a combination of a line of credit and a term loan. Typically it starts out as a line for a one-to-three year period, after which, on a previously determined date, the outstanding balance converts to an amortizing term loan.
  
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