What is the difference between a credit line and a term loan?

What is the difference between a credit line and a term loan Introduction: The Borrowing Landscape Hello everyone! In today's video, we'll be exploring the intricacies of credit lines and term loans. These financial tools are often utilized by individuals and businesses alike to meet their funding requirements. While they may seem similar at first glance, their underlying mechanics and features set them apart. So, let's delve into the details! Defining the Basics: Credit Line and Term Loan Before we proceed, let's establish a clear understanding of what a credit line and a term loan entail. A credit line, also known as a line of credit, is a pre-approved amount that a borrower can access as needed. It's akin to a financial safety net, providing flexibility and convenience. On the other hand, a term loan is a lump sum amount borrowed for a specific period, with fixed repayment terms. It's often used for large, one-time expenses. Flexibility vs. Certainty: Usage Scenarios