Choosing a product
Line of credit vs. term loan
When flexibility matters more than a lump sum — and when it is the other way around.
Written by Fundrillo Editorial TeamReviewed by [VERIFIED REVIEWER — financial-services]
Last updated August 1, 20266 min read
These two products solve different problems. Choosing between them comes down to whether you need flexibility or a fixed lump sum.
When a line of credit fits
If your needs come and go — seasonal inventory, occasional gaps — a line of credit lets you draw, repay, and draw again, paying for what you use.
When a term loan fits
If you have one clear, budgeted investment with an expected return, a term loan gives you the full amount up front with predictable payments.