Clarification/Follow-up by Jim.McGinness on 04/11/06 1:20 pm:
It's unclear what you are asking.

A Line of Credit is a form that a loan can take. It could be a secured loan, such as a second mortgage on your home [sometimes called a Home Equity Line of Credit) or, for a business, against some asset. If you were to get an unsecured loan, that might also be treated as a line of credit -- making it nearly indistinguishable from a credit card account.

The main difference between a line of credit and other types of loans is that, with the line of credit, you have more choice about when to draw the money. You don't simply get a check from the bank (or a credit on your real estate transaction) at the point where the loan goes through. Usually, if you do not draw any money from the line, it costs nothing or only a nominal handling fee. The money remains available until you need it.

Your loan agreement will state what the repayment terms are for the line of credit. Some lines are short term, simply to cover the possible difference between payroll and accounts receivable and must be repaid within the following month. Others allow you to repay the amount taken out over an extended period of time.