While you are a personal line of credit works similarly to a card card, a consumer loan is an even more old-fashioned loan solution. Identical to which have home financing otherwise auto loan, consumer loan borrowers will pay back the balance and you will notice having the same payment matter each month, when you’re a personal line of credit will get varying minimum money.
“With a line of credit, sometimes the lowest commission is actually below the eye you to accrues each month,” states Krueger.