In the given article the answer to following questions is given:

— In what a difference between a “loan” and a “credit line”?

— They render what influence for the sum of credit points?

So let us begin:

Let assume that we will understand in more details the difference between these concepts.

The basic difference between a credit line and a loan, first of all consists in a payment procedure.

So any way what is better: a loan or a credit line?

Credit line (line of credit)

The received means in the various purposes give the chance to the borrower to use the agreement on credit line granting. At credit line reception is the total established sum which the client can obtain in bank. The flexible hours are given — there is no fixed maturity date, for example, you can spend once the entire sum then will come to make accounts with instructions of minimum payment. The size of minimum payment depends on conditions of the company which has given a credit line. The available credit amount proportionally renews in process of debt settlement.

The credit line doesn’t demand each time to legalize papers in bank on purchasing.


The loan, assumes target granting of means with the accurate schedule of payments, it has a definite period of repayment which makes a reservation in the contract (two years, ten years etc.) For many clients, discipline of repayment of an amount of debt for a definite period is more attractive offer than payment during uncertain term.

Now, let’s look how the loan or credit line is used, it is displayed on a condition of credit points.

At loan use, in the credit report it is possible to see:

How the payment is produced;

Extent of a debt;

Predictability of expenses;

The size of a remainder of a subject for payment.

At credit line use:

to the creditor it is not clear how and when the client will extinguish the balance sheet completely;

it is impossible to predict expenses on this account.

The size of a limit of a credit line is underlined in the report. Approach of expenses to a limit of expenses of a credit line is equivalent to approach to a limit of expenses on a credit card. The given circumstance negatively affects the sum of credit points of the report — credit points start to fall. For example, credit line use is inexpedient in that case when you try to increase a score in the credit report. In it, actually, the question in the given clause also consists. So now you know all the necessary information about credit lines and loans and you know what to choose for yourself.

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