A line of credit is different from a loan in that a loan is a fixed sum of money repaid over a fixed term (period of time), and a line of credit is a revolving account a creditor can borrow against, withdrawing funds up to the maximum amount of the line of credit, and paying-down the line of credit at any time, with the balance fluctuating over time. Thus, a line of credit is more similar to a credit card account, but is usually provided by a local bank based on the debtor’s personal or business relationship with the bank.

In Delaware, as in other states, a line of credit and a loan are distinct financial products. A loan in Delaware is a specific amount of money borrowed that must be repaid over a predetermined period, often with interest, according to the terms of the loan agreement. In contrast, a line of credit is a flexible borrowing option that allows the borrower to draw funds up to a certain limit, repay them, and borrow again as needed. The balance of a line of credit can go up or down over time, depending on the borrower's withdrawals and payments. This financial arrangement is indeed akin to a credit card, where the borrower has a maximum credit limit and can utilize the funds as needed, paying interest on the outstanding balance. Lines of credit in Delaware can be secured or unsecured and are frequently offered by banks with which the borrower has an existing personal or business relationship. The specific terms and regulations governing lines of credit and loans are subject to state statutes and federal laws, including the Delaware Code and regulations set forth by federal agencies such as the Consumer Financial Protection Bureau (CFPB).