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 Ohio, as in other states, a line of credit and a loan are distinct financial products. A loan is a lump sum of money that is borrowed and then repaid with interest over a predetermined period. Once the loan is paid off, the agreement ends. In contrast, a line of credit is a flexible borrowing option where the borrower is approved for a certain amount of credit and can draw funds up to that limit as needed. The borrower can then repay the borrowed amount over time, often with the flexibility to borrow again up to the limit without a new application process. This makes a line of credit similar to a credit card, where the available credit replenishes as payments are made. In Ohio, lines of credit are often offered by local banks and are based on personal or business relationships, as well as the borrower's creditworthiness. The specific terms and regulations governing lines of credit and loans are subject to both Ohio state statutes and federal laws, including the Truth in Lending Act (TILA), which requires lenders to disclose credit terms to consumers in a clear manner, and the Ohio Consumer Sales Practices Act, which protects consumers from unfair, deceptive, or unconscionable sales practices.