Committed Credit Line

AAA

DEFINITION of 'Committed Credit Line'

A monetary spending loan balance offered by a financial institution that cannot be suspended without notifying the borrower. A committed credit line is a legal agreement between the financial institution and the borrower outlining the conditions of the credit line. Once signed, the agreement requires the financial institution to lend money to the borrower, provided that the borrower does not break the conditions. Lenders may require the borrower to pay a fee based on the amount that can be borrowed.

INVESTOPEDIA EXPLAINS 'Committed Credit Line'

Committed credit lines differ from uncommitted credit lines in that they legally bind the lender to provide the funds, rather than giving the lender the option of suspending or canceling the credit line based on market conditions.

RELATED TERMS
  1. Revocable Line Of Credit

    A source of credit provided to an individual or business by a ...
  2. Credit

    1. A contractual agreement in which a borrower receives something ...
  3. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  4. Revolving Credit

    A line of credit where the customer pays a commitment fee and ...
  5. Credit Facility

    A type of loan made in a business or corporate finance context. ...
  6. Readvanceable Mortgage

    A mortgage feature that allows the borrower to re-borrow the ...
Related Articles
  1. Bonds & Fixed Income

    The Treasury And The Federal Reserve

    Find out how these two agencies create policies to stimulate the economy in tough economic times.
  2. Credit & Loans

    Check Your Credit Report

    Make sure there are no errors holding you back from obtaining a loan.
  3. Options & Futures

    Home-Equity Loans: The Costs

    Learn the factors to consider when comparing the different programs offered by various lenders.
  4. Options & Futures

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  5. Options & Futures

    Car Title Loans: Good Option For Fast Cash?

    These loans provide fast cash, but they could leave you deeper in debt - and without a car.
  6. Credit & Loans

    What are some good alternatives to taking out a line of credit?

    Read more about how opening a line of credit might not be the best answer for you and determine available alternatives if you're looking to borrow.
  7. Home & Auto

    What are the differences between a home equity line of credit (HELOC) and a home equity loan?

    Learn the differences between a home equity loan and a home equity line of credit, and find out how to select the one that works for you.
  8. Home & Auto

    What are some examples of a good time to take out a home equity line of credit (HELOC)?

    Determine if a home equity line of credit (HELOC) is right for you by looking into the most common and ideal uses of these loan products.
  9. Credit & Loans

    What is the difference between a loan and a line of credit?

    Learn to differentiate between lines of credit and standard loans, and determine when you are likely to use each method of borrowing funds.
  10. Credit & Loans

    What is the difference between overdraft and cash credit?

    Learn about the uses of the terms ''overdraft'' and ''cash credit,'' and how they represent different financial arrangements for borrowing funds from a bank.

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center