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 Utah, as in other states, a line of credit and a loan are distinct financial products. A loan in Utah is a specific amount of money borrowed that must be repaid over a predetermined period, often with a fixed repayment schedule and interest rate. In contrast, a line of credit is a flexible borrowing option that allows the borrower to draw funds up to a certain limit, repay them, and borrow again. It operates similarly to a credit card, with a revolving balance that can fluctuate over time. The interest on a line of credit in Utah typically accrues only on the amount of money drawn, not on the entire credit limit. Lines of credit can be secured or unsecured and are often offered by local banks based on personal or business relationships. Utah's financial institutions are regulated by state statutes and federal law, which govern the terms and conditions of both loans and lines of credit, including disclosure requirements, interest rates, and consumer protection provisions.