{"id":7443,"date":"2023-01-31T14:52:52","date_gmt":"2023-01-31T09:22:52","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=7443"},"modified":"2025-02-13T17:26:04","modified_gmt":"2025-02-13T11:56:04","slug":"revolving-line-of-credit-features-benefits-more","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/","title":{"rendered":"What Is a Revolving Line of Credit and How Does It Work?"},"content":{"rendered":"<p>In the world of business financing, having access to flexible funding can make all the difference when it comes to managing cash flow, seizing growth opportunities, and navigating unexpected expenses.<\/p>\n<p>This is where a revolving <a href=\"https:\/\/razorpay.com\/blog\/business-banking\/introducing-razorpay-line-of-credit\/\">line of credit<\/a> enters the picture as a valuable financial tool. If you&#8217;ve ever wondered about the inner workings of a revolving line of credit and how it can benefit your business, you&#8217;re in the right place.<\/p>\n<p>In this blog, we&#8217;ll take a deep dive into the world of revolving credit, uncovering what it is, how it operates, and the advantages it offers to businesses of all sizes<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69ea419034d69\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ea419034d69\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Revolving-line-of-credit-meaning\" >Revolving line of credit meaning:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Why-is-revolving-line-of-credit-important-for-businesses\" >Why is revolving line of credit important for businesses?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#How-does-revolving-line-of-credit-work\" >How does revolving line of credit work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Advantages-of-revolving-line-of-credit\" >Advantages of revolving line of credit<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Flexible-repayment-structure\" >Flexible repayment structure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Lenient-eligibility-parameters\" >Lenient eligibility parameters<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Positive-impact-on-company-credit-report\" >Positive impact on company credit report<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Levelling-the-competitive-field\" >Levelling the competitive field<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Disadvantages-of-revolving-credit-line\" >Disadvantages of revolving credit line<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Can-a-revolving-credit-line-help-you-build-credit-score\" >Can a revolving credit line help you build credit score?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Types-of-revolving-line-of-credit-for-businesses\" >Types of revolving line of credit for businesses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Razorpay-Line-of-Credit\" >Razorpay Line of Credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Steps-to-Apply-for-Razorpay-Line-of-Credit\" >Steps to Apply for Razorpay Line of Credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/revolving-line-of-credit-features-benefits-more\/#Frequently-Asked-Questions\" >Frequently Asked Questions<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Revolving-line-of-credit-meaning\"><\/span>Revolving line of credit meaning:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A revolving line of credit is a type of loan that provides borrowers with access to a set amount of funds that can be borrowed and repaid multiple times. It is different from a traditional loan because it does not require you to apply for a new loan each time you need funds.<\/p>\n<p>Businesses often look for alternative financing means for capital expansion to ensure they do not struggle during an imbalanced business cycle. Hence, several businesses are considering a <a href=\"https:\/\/razorpay.com\/x\/line-of-credit\/?utm_source=Content&amp;utm_medium=Learn&amp;utm_campaign=What+Is+a+Revolving+Line+of+Credit+and+How+Does+It+Work%3F\">revolving credit line<\/a> as their ideal capital source in this regard.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why-is-revolving-line-of-credit-important-for-businesses\"><\/span>Why is revolving line of credit important for businesses?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Businesses in India&#8217;s MSME sector face major challenges in accessing formal credit due to being considered high-risk borrowers without collateral or assets. This lack of access to credit affects the ability of these businesses to contribute to a third of the nation&#8217;s GDP, as they struggle to meet their basic expenses.<\/p>\n<p>A global <a href=\"https:\/\/bfsi.economictimes.indiatimes.com\/news\/financial-services\/msmes-growth-doubles-in-last-2-years-credit-gap-remains-report\/96221758#:~:text=In%20India%2C%20the%20overall%20credit,%2C%20growing%20at%2011.5%25%20CAGR.\" target=\"_blank\" rel=\"noopener\">study<\/a> by BLinC Invest found that around 40% of small enterprises&#8217; financial needs go unfulfilled. In India, the credit gap for this sector is estimated to be around \u20b925 trillion.<\/p>\n<p>Alternative financing solutions, such as a revolving instant credit line, have become popular as they can be availed without any security and offer immediate temporary liquidity for new businesses with limited capital. This type of loan also allows businesses to receive funds quickly without the risk of falling into debt.<\/p>\n<p>If you want to apply for a revolving line of credit, click on the CTA below.<\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528ff0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/line-of-credit\/?utm_source=Content&amp;utm_medium=Learn&amp;utm_campaign=What+Is+a+Revolving+Line+of+Credit+and+How+Does+It+Work%3F\" target=\"_blank\" rel=\"noopener noreferrer\">Apply Now!<\/a><\/div>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How-does-revolving-line-of-credit-work\"><\/span>How does revolving line of credit work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A revolving line of credit is a type of loan that allows a borrower to repeatedly access a set amount of funds. Unlike traditional loans, a revolving line of credit is not a one-time <a href=\"https:\/\/razorpay.com\/learn\/lump-sum-payment\/\">lump sum payment<\/a>, but instead is a continuous source of funding that the borrower can access as needed.<\/p>\n<p>Here&#8217;s how it works: A lender evaluates the borrower&#8217;s application and sanctions a specific credit limit. A revolving credit account is then opened in the borrower&#8217;s name. The borrower can then take out a portion of the permitted credit limit as a loan whenever needed during the business cycle.<\/p>\n<p>The borrower can repeatedly access funds as long as the credit limit has not been exhausted. As the borrower pays down the balance, the amount, minus fees and interest charges, is automatically added back to the total credit available.<\/p>\n<p>For a revolving line of credit, businesses only need to pay interest on the amount they have drawn, reducing their overall cash outflow. And unlike traditional loans, a revolving line of credit does not require collateral, making it an attractive option for businesses with limited assets.<\/p>\n<p>It also provides businesses with a flexible and convenient source of funding that they can access as needed. Whether used for working capital or to handle unexpected expenses, a revolving line of credit can help businesses grow and succeed.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Advantages-of-revolving-line-of-credit\"><\/span>Advantages of revolving line of credit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Some crucial benefits of a revolving line of credit include the following.<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Flexible-repayment-structure\"><\/span>Flexible repayment structure<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>A business may have an urgent requirement for working capital for various reasons, such as investing in growth opportunities or paying legal fees. In these situations, quick access to funds is essential. A revolving line of credit offers a solution by allowing a business to borrow and repay credit repeatedly over a short period.<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Lenient-eligibility-parameters\"><\/span>Lenient eligibility parameters<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>Traditional banks look at several factors, like a business&#8217;s potential for success, its type, and credit score, when evaluating loan applications. A revolving line of credit, however, has simpler eligibility requirements and businesses that meet them can easily access funding regardless of other factors like a lower credit score, making it an ideal solution for small businesses.<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Positive-impact-on-company-credit-report\"><\/span>Positive impact on company credit report<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>Making timely payments on a line of credit loan can help improve a business&#8217;s credit score and increase its creditworthiness, making it easier for the company to access future funding.<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Levelling-the-competitive-field\"><\/span>Levelling the competitive field<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>In order to compete in the global marketplace, it is important for businesses to have access to funding for advertising and marketing, which a line of credit can provide.<\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528ff0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/line-of-credit\/?utm_source=Content&amp;utm_medium=Learn&amp;utm_campaign=What+Is+a+Revolving+Line+of+Credit+and+How+Does+It+Work%3F\" target=\"_blank\" rel=\"noopener noreferrer\">Get revolving credit<\/a><\/div>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Disadvantages-of-revolving-credit-line\"><\/span>Disadvantages of revolving credit line<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While revolving lines of credit offer numerous benefits for businesses, they also come with certain disadvantages that need to be carefully considered. Here are some of the disadvantages of a revolving credit line:<\/p>\n<ul>\n<li><strong>Debt accumulation<\/strong>: The revolving nature of the credit line can lead to a cycle of debt accumulation, especially if businesses rely too heavily on the credit without a clear repayment plan. Continuously carrying balances and making minimum payments can result in a growing debt burden, which can be detrimental to the business&#8217;s financial health.<\/li>\n<li><strong>Variable interest rates<\/strong>: Many revolving credit accounts have variable interest rates, which means that the interest rate can change over time based on market conditions. This introduces uncertainty into the cost of borrowing and could lead to higher payments if interest rates rise.<\/li>\n<li><strong>Potential for over-borrowing<\/strong>: The easy access to funds with a revolving line of credit can lead to over-borrowing, where businesses take on more debt than they can reasonably manage. This can strain finances and hinder the ability to invest in growth opportunities or weather economic downturns.<\/li>\n<li><strong>Limited use for long-term investments:<\/strong> Revolving credit is generally more suitable for short-term financing needs, such as managing working capital or covering immediate expenses. It might not be the best option for larger, long-term investments, as the revolving structure might not provide the most favourable terms for such purposes.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Can-a-revolving-credit-line-help-you-build-credit-score\"><\/span>Can a revolving credit line help you build credit score?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Yes, revolving line of credit can help improve a business&#8217;s credit score if it is managed responsibly. Here&#8217;s how responsible use of revolving credit line can positively impact a business&#8217;s credit score:<\/p>\n<ul>\n<li><strong>Payment history:<\/strong> Timely and consistent payments on revolving credit line accounts demonstrate the business&#8217;s ability to manage debt and meet financial obligations. Payment history is a significant factor in calculating credit scores.<\/li>\n<li><strong>Credit utilisation ratio:<\/strong> This ratio measures the amount of credit being used compared to the total available credit limit. Keeping this ratio low, ideally below 30%, indicates that the business is not overly reliant on credit and is using it responsibly. A lower credit utilisation ratio can positively impact the credit score.<\/li>\n<li><strong>Credit mix:<\/strong> Having a diverse mix of credit types, including revolving credit, instalment loans, and other forms of credit, can contribute positively to a business&#8217;s credit score.<\/li>\n<li><strong>Credit history length:<\/strong> The longer a business maintains a positive history with revolving credit, the better it is for the credit score. A longer credit history demonstrates stability and responsible credit management.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Types-of-revolving-line-of-credit-for-businesses\"><\/span>Types of revolving line of credit for businesses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<table>\n<tbody>\n<tr>\n<td><b>Type of business revolving line of credit<\/b><\/td>\n<td><b>Description and purpose<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Traditional <a href=\"https:\/\/razorpay.com\/learn\/how-to-use-a-credit-line-for-your-business\/\">business line of credit<\/a><\/span><\/td>\n<td><span style=\"font-weight: 400;\">Standard revolving credit for day-to-day operational expenses, inventory purchases, and cash flow management.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Asset-based line of credit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Secured by company assets (e.g., accounts receivable, inventory, equipment) with credit limit based on asset value.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Seasonal line of credit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Provides additional funds during peak seasons to manage increased expenses and cash flow fluctuations.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Working capital line of credit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Designed to cover working capital needs, including operational expenses, supplier payments, and short-term liabilities.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Purchase order financing<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Funds provided to fulfil customer orders by covering the cost of goods required to complete the order.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Inventory line of credit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Supports inventory management by providing funds for purchasing inventory; repaid as inventory is sold.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Contract financing<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Offers funding for businesses working on large contracts, providing necessary capital based on contract terms.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Export-import line of credit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Assists businesses engaged in international trade by financing import and export activities, including associated costs.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Small business administration (SBA) line of credit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">SBA-backed lines of credit designed to support small businesses with favourable terms and easier qualification.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Revolving credit card for business<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Functions like personal credit cards, offering a revolving credit line for smaller expenses and day-to-day cash flow.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Vendor line of credit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Provided by suppliers to allow businesses to purchase goods and services on credit terms, maintaining supplier relations.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Equipment line of credit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Used to acquire or lease equipment needed for business operations, financing equipment purchases as required.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Franchise line of credit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Tailored to the unique financial requirements of franchise businesses, offering specialised credit solutions.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><em><strong>Please note that this table provides a concise overview of the various types of revolving lines of credit for businesses and their purposes. The specifics of each type, including eligibility criteria, terms, and benefits, can vary based on the lender and the business&#8217;s financial situation.<\/strong><\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Razorpay-Line-of-Credit\"><\/span>Razorpay Line of Credit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As a top provider of payment solutions in India, Razorpay is the go-to source for small businesses and startups looking for alternative credit lending options. With no processing fees and a starting interest rate of 1.5%, companies can benefit from opening a line of credit with Razorpay. This <a href=\"https:\/\/razorpay.com\/x\/line-of-credit\/?utm_source=Content&amp;utm_medium=Learn&amp;utm_campaign=What+Is+a+Revolving+Line+of+Credit+and+How+Does+It+Work%3F\">line of credit<\/a> offers easy access to funding up to Rs. 25 lakhs with a simple application process and fast disbursement time.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Steps-to-Apply-for-Razorpay-Line-of-Credit\"><\/span>Steps to Apply for Razorpay Line of Credit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><a href=\"https:\/\/www.youtube.com\/watch?v=n8NcVbS_r3s&amp;list=PL3iqOV5yVtsn25qEnxP4hm_opckH6MT1_&amp;ab_channel=UditiJohar\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"aligncenter wp-image-8741 size-large\" src=\"https:\/\/d6xcmfyh68wv8.cloudfront.net\/learn-content\/uploads\/2023\/01\/Screenshot-2023-08-23-at-3.51.05-PM-1024x545.png\" alt=\"Apply for Razorpay Line of Credit\" width=\"1024\" height=\"545\" srcset=\"https:\/\/d6xcmfyh68wv8.cloudfront.net\/learn-content\/uploads\/2023\/01\/Screenshot-2023-08-23-at-3.51.05-PM-1024x545.png 1024w, https:\/\/d6xcmfyh68wv8.cloudfront.net\/learn-content\/uploads\/2023\/01\/Screenshot-2023-08-23-at-3.51.05-PM-300x160.png 300w, https:\/\/d6xcmfyh68wv8.cloudfront.net\/learn-content\/uploads\/2023\/01\/Screenshot-2023-08-23-at-3.51.05-PM-1536x818.png 1536w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a>You can apply for this facility by following the steps mentioned.<\/p>\n<p>Step 1: Head to the <a href=\"https:\/\/razorpay.com\/x\/line-of-credit\/?utm_source=Content&amp;utm_medium=Learn&amp;utm_campaign=What+Is+a+Revolving+Line+of+Credit+and+How+Does+It+Work%3F\">Razorpay website<\/a><\/p>\n<p>Step 2: Select \u2018Get a Line Now\u2019 and opt for any of these two options as it suits you:<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\u2018I am new to Razorpay\u2019<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\u2018I am already a Razorpay Customer\u2019<\/li>\n<\/ul>\n<p>Step 3: Input your crucial personal information, as required<\/p>\n<p>Step 4: Provide the annual turnover or revenue range of your company<\/p>\n<p>Step 5: Enter the necessary data about your enterprise<\/p>\n<p>Step 6: Attach this enterprise\u2019s credit report<\/p>\n<p>Step 7: Attach the primary bank account statements of this enterprise<\/p>\n<p>Step 8: You will have to submit the KYC records of your company via email or submit on the dashboard once the application has been accepted<\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528ff0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/line-of-credit\/?utm_source=Content&amp;utm_medium=Learn&amp;utm_campaign=What+Is+a+Revolving+Line+of+Credit+and+How+Does+It+Work%3F\" target=\"_blank\" rel=\"noopener noreferrer\">Get Line of Credit<\/a><\/div>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Frequently-Asked-Questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong>Q1. What are the pre-closure charges for Razorpay Line of Credit?<\/strong><\/p>\n<p>Ans. When you are using this revolving credit line, the platform does not levy any pre-closure charges or penalty.<\/p>\n<p><strong>Q2. How to estimate the EMI payable for Razorpay Line of Credit?<\/strong><\/p>\n<p>Ans. You can use the free EMI calculator on <a href=\"https:\/\/razorpay.com\/x\/line-of-credit\/?utm_source=Content&amp;utm_medium=Learn&amp;utm_campaign=What+Is+a+Revolving+Line+of+Credit+and+How+Does+It+Work%3F\">Razorpay platform<\/a> to calculate your monthly payments.<\/p>\n<p><strong>Q3. Which businesses can opt for Razorpay Line of Credit?<\/strong><\/p>\n<p>Ans. A business can opt for a line of credit from Razorpay as long as it:<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Is operational for a year at the minimum<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Has an annual turnover of Rs. 20 Lakhs at the least<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With a revolving line of credit, businesses can receive an immediate working capital boost without an excessive interest outgo. Read to know more.<\/p>\n","protected":false},"author":151156487,"featured_media":7444,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3437,3643],"tags":[],"class_list":{"0":"post-7443","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking","8":"category-capital"},"_links":{"self":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/7443","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/users\/151156487"}],"replies":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/comments?post=7443"}],"version-history":[{"count":9,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/7443\/revisions"}],"predecessor-version":[{"id":15823,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/7443\/revisions\/15823"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media\/7444"}],"wp:attachment":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media?parent=7443"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/categories?post=7443"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/tags?post=7443"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}