Differences Between Loans and Credit

On the street tend to use the terms loans and credit interchangeably when a person wants to refer to the situation in which it is requesting an amount of money, with the obligation to repay that amount, plus interest that were generated with the loan or credit.

Surely we will ever used these terms without distinction to mean one thing or another, saying this "I'll borrow" or "I'm going to borrow money" and believing that both meant the same thing. However, although they may seem the same, and usually these concepts are used synonymously, they are not.

There are differences between loans and credits and is very interesting to know them to apply what best suits our needs.

Then we will analyze the differences between the two terms because it is useful to know what are each of them, because in the very definition we realize that there is a same meaning and therefore not the same type of operation.
A brief overview

The loan is a transaction in which a lender, which is usually a bank, gives the consumer a certain amount of money that must be repaid on a regular basis, and depending on the agreement it reached with the borrowing entity, it may be monthly, quarterly, semiannual or annual.

Credit is a limit amount of money that the applicant thereof, is granted provided as is within the scope of a credit account you have with a bank.
main differences

Interest payments. The credit is paid only the interest on the capital drawn down, the total of the granted, and if not available in any amount, no interest will be generated. However in the loan itself interest on the total amount of money requested are paid.

Renewal. In the loans are not allowed to maturity is renewed, however in the case of loans if your renovation and extension as often as you want is allowed.

Delivery capital. The entity granting the loan will be performing partial deliveries up to a limit that has been agreed. While on the loan the bank will deliver the full amount at the time of the execution thereof.

Use. The loans are usually used by employers, self, they need some liquidity at a given time. Furthermore, they are also used by people with irregular incomes, they need for their own consumption, the most common being those seeking loans for home purchase and known as mortgage loan.

Generally personal loans are usually granted to individuals and are for private use and personal guarantees as collateral or some type of real guarantee is required.