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 Hawaii, as in other states, a line of credit and a loan are distinct financial products. A loan in Hawaii is a specific amount of money borrowed that must be repaid over a set period, often with interest, according to the terms of the loan agreement. In contrast, a line of credit in Hawaii operates as a revolving account, similar to a credit card, where the borrower has access to a maximum credit limit and can draw funds as needed up to that limit. The borrower can repay and re-borrow funds within the line of credit's terms. The balance owed can fluctuate based on how much the borrower takes out and pays back. Lines of credit can be secured or unsecured and are often offered by local banks, with the terms of the credit line often based on the borrower's personal or business relationship with the bank. The specific regulations governing lines of credit and loans in Hawaii would be outlined in the Hawaii Revised Statutes, and federal laws such as the Truth in Lending Act would also provide consumer protections and disclosure requirements for these financial products.