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 South Carolina, as in other states, a line of credit and a loan are two distinct financial products offered by financial institutions. A loan in South Carolina is a fixed amount of money that is borrowed and must be repaid over a predetermined period, often with interest. This includes mortgages, auto loans, and personal loans. On the other hand, a line of credit in South Carolina 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. The borrower can repay and re-borrow funds up to the credit limit, and the balance owed can go up or down over time. Interest is typically charged on the amount borrowed, and the terms of repayment are more flexible than with a traditional loan. Both personal and business lines of credit are commonly based on the borrower's relationship with the bank and their creditworthiness. State statutes and federal laws, such as the South Carolina Consumer Protection Code and the Truth in Lending Act, regulate the offering and administration of these credit products to protect consumers and ensure fair lending practices.