12 Difference Between Loan And Credit

1. A line of credit is similar to a credit card in that it is a flexible borrowing solution. 2. Credit generally refers to advances made by a bank to a borrower. Credit may be in many forms like overdraft,short tetm loan,long term loan, bill diasounting and also non-fund facilities like Bank guarantees.  3. With a credit facility interest is paid only on the money you have used, not on the total amount of money the bank has made available to you.  4. Getting a loan means you actually receive the money. Getting credit, on the other hand, is more like getting approved for a loan. 5.  Many loans also require a specific purpose. Lines of credit, however, do not typically have a specific purchase purpose. Purchases can be made on a variety of items without the lender's approval, and no assets have to be appraised. 6. The interest rate on a loan is usually lower than that on a credit card. 7. Loan is one of the forms of the credit which is payable over a period of time.