LOC Full Form

Full Form of LOC

LOC stands for Line of Control and Line of Credit. Line of Control is the military control line between the Indian and Pakistani controlled parts at the former princely state of Jammu and Kashmir. The Line of Credit is a kind of agreement that is signed between two institutions of the financial market. These institutions are banks or several clients that help in establishing the line of the amount that the customer can borrow. On the other hand, the Line of Credit is based on the sources of funds that are unsecured and ready for funding. These credit lines can also be used for personal needs as well as for business purposes. In this mechanism, the withdrawal of funds from the board was in the line of credit and can be accounted as a loan either through the transfer of amount through bank or credit checks.

Discussion

Line of Control

The line of control is the military control line between the Indian and Pakistani controlled parts at the former princely states of the Jammu and Kashmir. The line of control does not constitute the legally recognized international boundary that serves the present de facto border. The fronts became a solid country to develop the line that has been originally marked as a solid boundary. It was the name of the line of control after the Shimla agreement that was assigned on the 3rd July 1997.  The Line of Control has been disputed due to the provision of the international border. That has been agreed upon by both of the countries in the 1972 agreement. The unsettled nature of the border has kept the conflict between India and Pakistan alive. The line originally marked the military front when the two countries declared a ceasefire on the 1 and 2 January 1949.

Three Lines of Credit

Credit account generally comes in different forms such as auto loans, mortgages, student loans, credit cards etc. but there are a few more which has been categorized and classified into further three types of distinct credit. Therefore three different types of credits limits are- open credit, installment credit, revolving credit. It has been also stated that these lines of credit can also be borrowed and can be repaid by using different structures.

• • Installment Credit: In the installment credit system, it has been evaluated that it is a credit mechanism where the loan can be borrowed on a lump sum basis and can also be repaid with fixed payments in terms of interest. Once, when the credit is generally paid, the account is said to be considered a closed account. Examples of this kind of credit system of payments are- personal loans, loans for the students, auto loans and many others.

     

  • Open Credit: open system has a unique system of payment strategy where it has been seen that the monthly payment basis generally varies and also the balance becomes due at the end of the billing cycle. The electricity bill can be set as a great example for the open credit system, where it has been seen that the amount which is due generally depends on the electricity which is used by the individual as per the given month. It is also expected that the individual has to pay the entire bill in a certain amount of days after the bill is being received.

     

  • Revolving Credit: The revolving credit accounts generally give allowance to the borrower so that they can repay the amount from a single line method that has a maximum limit. Interest is charged on the remaining balance for each statement as per the due date. So it is easily possible to avoid the interest which is paid for the balance at the end of each month.

The positive impact of Line of Credit

The usefulness of line of credit is discussed in this point, where it has been stated that these credits generally are not used for the payment of one time purchases such as a car or a house, for which auto loans and mortgages exist respectively. These methods are used for acquiring items that are not easily available from banks or through underwritten loans. Often, these credit lines are used for some basic purposes of doing a business such as for smoothening out the variables of monthly income and also for the expenses that are used in several financial projects where it is very difficult to evaluate the exact amount of funds that will be required for completing the given project in advance.

Conclusion

Hence, it can be concluded that the line of credit provides an end number of benefits in the financial market, by providing changeable access to the funds rather than one time purchases. the most important factor of these policies is they allow for borrowing the amount which is required at the time and also avoids payment of interest in huge terms. Therefore, it is sometimes also recommended that the borrower should also keep in mind and should also be aware of the various problems which is found in the line of credit.