Committed Credit Line


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.

BREAKING DOWN '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.

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  1. What is the difference between "closed end credit" and a "line of credit?"

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  3. What is the difference between subordinated debt and senior debt?

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