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What is the difference between a loan and a line of credit?

Category: Personal   Service: Consumer Loans | Updated: March 28th, 2023

Answer:

When a borrower takes a loan, they receive a one-time lump sum disbursement, which is paid back in equal installments over the term of the loan (close-ended credit).

When a borrower has a line of credit, they can access funds on an ongoing basis. Repayment is based on the balance outstanding (revolving credit).

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