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 Mississippi, as in other states, a line of credit and a loan are distinct financial products. A loan in Mississippi 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 is a flexible borrowing option where the borrower is approved for a maximum amount and can draw funds up to that limit as needed. The borrower can repay and re-borrow funds within the line of credit's terms. This flexibility makes a line of credit similar to a credit card. Lines of credit can be secured or unsecured and are often offered by local banks, with terms based on the borrower's personal or business relationship with the bank. Mississippi state statutes and federal laws regulate both loans and lines of credit, including interest rates, lending practices, and consumer protections. It's important for borrowers to understand the terms and conditions, as well as their rights and responsibilities under Mississippi law when engaging in any credit agreement.