163k views
2 votes
What's the main difference between a personal loan from a bank, which is an installment loan, and revolving credit?

User Wimagguc
by
8.4k points

1 Answer

5 votes

Final answer:

The main difference between a personal loan from a bank, which is an installment loan, and revolving credit is the way the borrowed funds are repaid.

Step-by-step explanation:

The main difference between a personal loan from a bank, which is an installment loan, and revolving credit is the way the borrowed funds are repaid. In a personal loan, the borrower receives a lump sum of money and repays it in fixed monthly installments over a predetermined period of time. Revolving credit, on the other hand, provides the borrower with a line of credit that can be used repeatedly up to a certain limit. The borrower can choose to make minimum payments or pay off the balance in full, and the available credit is replenished as payments are made.

User Muhammad Adnan
by
7.7k points