Line of Credit - These loans are usually described as your best friend or your worst enemy. If you have discipline and use this loan correctly, you can enjoy the benefits of reducing your interest substantially saving you years on the term of your loan. Line of Credit loans are interest only variable loans allowing the borrower the flexibility of using the equity in their home and the added flexibility of a transaction account built in with a debit and credit card attached to the home loan. The equivalent of having a great big credit card with interest only repayments. Income is paid into the account meaning less interest. Downfall is this loan may never be paid off unless the borrower is disciplined.