Notwithstanding its revocable nature, such a line of credit offers a bank's clients financial flexibility since interest is paid only on the actual amount of funds drawn down. Another attractive feature of this line of credit is its revolving nature, with the full amount being available to the client once all advances under it have been repaid.
Home Equity Lines of Credit (HELOCs) were very popular in North America during the real estate boom of 2002-06. However, as housing prices collapsed and homeowners' equity shrank drastically, some lenders increasingly resorted to reductions and revocations of such credit facilities.
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