Editor's choice: Upgrade personal loans
- Flexible loan options
- No prepayment penalty
- Quick turnaround
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Personal loans and lines of credit are similar products with different goals. A personal loan delivers a single lump sum with fixed monthly payments, while a line of credit offers ongoing access to a maximum credit line that you repay as needed. The right choice depends on how you plan to use your money.
Funds from a personal loan are given as a lump sum while funds from a line of credit are given as needed, similar to a credit card. Both can be used for everyday expenses or emergencies — either in full or in a smaller amount.
Major differences between personal loans and lines of credit include:
Personal loans allow you to borrow money in one lump sum with set interest rates, terms and fees. Fixed monthly payments allow you to budget how much you’ll owe each month.
Lenders offer loans from $1,000 to $100,000, though borrowing only what you need can help you avoid paying interest on money you won’t use.Our guide to personal loans
A personal loan is a good option when you have a set expense you need to cover, including:
A personal line of credit can be more flexible than a personal loan. You can borrow as much as you need up to your credit limit and pay interest only on the amount you use.
Most lines are revolving — meaning after you repay your balance plus interest, you can draw from it again. You can find lines of credit of up to $100,000 or more, but your credit limit depends on the type of collateral the lender requires.Our guide to personal lines of credit
You may need to pay a monthly or annual maintenance fee, though you aren’t required to use your credit line if you don’t need it.
Lines of credit can be good for unpredictable expenses, such as:
Select your credit score and state to see top lenders you might qualify for.
We update our data regularly, but information can change between updates. Confirm details with the provider you’re interested in before making a decision.
Loans and lines of credit are common ways to pay for life’s big expenses. The right choice depends on what you need to use the money for and how you want to repay. See who we think are the best personal loans and the best lines of credit.
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