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What is the difference between a personal loan and personal line of credit?

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A loan is a lump sum amount you borrow from a financial institution. To repay the loan, you make fixed payments over a predetermined period.

A line of credit is a revolving source of funds, up to an approved amount. You access the funds only when you need them. Any amount you repay is accessible to you again without reapplying. Unlike a personal loan, a line of credit lets you write cheques and make ATM withdrawals. Also, you only have to pay interest on the funds you use.

† Simplii Financial personal banking services are provided by the direct banking division of CIBC. Banking services not available in Quebec.
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