A personal loan is an amount of money that you borrow for a specified length of time. You make fixed monthly payments, which reduce the amount of the loan until it is paid in full.

A line of credit is an open-ended revolving credit line with a specified credit limit. It is similar to a credit card account except you use special personalized checks or drafts to access the funds rather than a plastic card. Your payment is based on the amount of the line you have used. The account is always available to you up to your assigned preset credit limit.