Locs give a lot of flexibility. Most traditional locs have adjustable rates based on the prime rate which is set by the fed. Right now prime is at 3.24% so the rate could be prime plus 7.76% which makes up 11%. As prime goes up or down so does the rate of the loc. Most people only make interest only payments on the outstanding balance until the loc matures and then make fixed payments principle and interest (like your car payments) until the balance comes to zero and the loc closes. This is done usually when the amount needed has been drawn, used for whatever its purpose was and the loc is no longer needed.
People can also lock in portions or the entire balance at any time and again make the fixed principle and interest payments while having the ability to draw more from the loc if needed.
This may or may not be the case of the initial draw.
11% is high but not crazy either by any means. This is not through the banks so you will not get the best rates. Currently I see rates anywhere from 5%-9% through the banks and usually depends on the amount, type of collateral, finances and other shit that the bank will look at in evaluating risk.
Locs can have any maturity length, it all depends on the purpose of the loc and or negotiations with the lender.
As far as having fees for future draws, not common with traditional bank products and not ideal. We don"t know if this is the case at all so I wont harp on it. This is the part that everyone seems to have debates with.
It really comes down to what ever is negotiated and in the contract. Since we don't have the contract we don't know.
This is based on my experience as a banker.
It may not answer your specific questions but we cant answer them without the contract.
