What is the difference between a loan and a line of credit?
Service: Consumer Loans | Updated: April 29th, 2014
- When a borrower takes a loan, he or she receives 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, he or she can access funds on an ongoing basis. Repayment is based on the balance outstanding (revolving credit).
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