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 Florida, a line of credit and a loan are distinct financial products. A loan is a specific amount of money borrowed that must be repaid over a predetermined period, often with fixed payments. In contrast, a line of credit operates as a revolving account, similar to a credit card, where the borrower has access to a maximum amount of funds that can be borrowed, repaid, and borrowed again. The borrower can withdraw funds up to the credit limit and make payments at any time, which affects the available balance. Lines of credit can be secured or unsecured and are often established based on personal or business relationships with a bank. The terms and conditions of lines of credit, including interest rates and repayment schedules, are governed by state statutes and federal law, including the Truth in Lending Act (TILA) at the federal level, which requires lenders to disclose credit terms to consumers. Florida's regulations also require clear communication of terms and adherence to lending laws to protect consumers from unfair practices.