Line of credit vs. loan

A line of credit lets you borrow and repay at your own pace, usually at a variable interest rate, so the cost depends on how quickly you pay it down. An installment loan advances a lump sum repaid in fixed monthly payments over a fixed term, typically at a fixed, predictable rate.

For both, we apply the standard amortization formula over the payoff period you enter, then total the interest paid. The line of credit uses the payoff period you choose; the loan uses its term.

If you pay the line off faster than the loan term, it can cost less interest, especially at a comparable rate. But its variable rate can rise and stretch out repayment. A term loan protects you against rate increases at the cost of flexibility.

No. It is an illustrative estimate only. Actual rates, fees and terms depend on the lender and your file.