What is the difference between loan and line of credit?
A loan is a sum of money lent to a borrower in full. The borrower receives a lump sum to complete their purchase, and the loan is then repaid in instalments, or repayments, over an agreed length of time.
A line of credit is different in that a borrower receives access to an agreed credit amount, like a credit card. The borrower can use their line of credit to make purchases, and then makes repayments only on what they have spent.