Line or credit is special credit facility given by lenders (banks or NBFCs) to loan applicants, wherein the borrower is approved for certain limit of credit (loan) for a said duration.

What makes the facility stand out is its monthly instalment which consists only of the interest amount and will not have a principal component on a monthly basis. You have to repay the principal amount of loan at the end of the tenure of the facility.

The best part of the line of credit is that you will be charged interest only on the amount that you utilise.

The way to calculate your interest is pretty simple.

Here’s the formula you can use for the calculation:

Interest = (Amount used * rate of interest) * Number of days’ funds used/360

Aastha Awasthianswered.Line or credit is special credit facility given by lenders (banks or NBFCs) to loan applicants, wherein the borrower is approved for certain limit of credit (loan) for a said duration.

What makes the facility stand out is its monthly instalment which consists only of the interest amount and will not have a principal component on a monthly basis. You have to repay the principal amount of loan at the end of the tenure of the facility.

The best part of the line of credit is that you will be charged interest only on the amount that you utilise.

The way to calculate your interest is pretty simple.

Here’s the formula you can use for the calculation:

Interest = (Amount used * rate of interest) * Number of days’ funds used/360