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. Revolving Credit

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

    A type of loan made in a business or corporate finance context. ...
  4. Credit

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

    An arrangement between a financial institution, usually a bank, ...
  6. Readvanceable Mortgage

    A mortgage feature that allows the borrower to re-borrow the ...
Related Articles
  1. The Treasury And The Federal Reserve
    Bonds & Fixed Income

    The Treasury And The Federal Reserve

  2. Check Your Credit Report
    Credit & Loans

    Check Your Credit Report

  3. Home-Equity Loans: The Costs
    Options & Futures

    Home-Equity Loans: The Costs

  4. Car Title Loans: Good Option For Fast ...
    Options & Futures

    Car Title Loans: Good Option For Fast ...

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center