A Loan will have set repayment terms and payments- eg-will be $10000.00 loan will be set up with a 5 year term and a $200.00 payment – they are open and payable at any time with no penalty and they are not re advanceable. A Line of Credit however is approved with a limit for a specified amount eg. 10000.00 limit- it can be used and paid with no restrictions. Payments are generally interest only, which make them very affordable. A line of Credit can be open and active for many years as long as it has been kept in good standing (works like a credit card).
Loans and Lines of Credit