But how exactly does this differ from say, a regular loan from the bank?An account that you set up with a financial institution (often a bank) to borrow money. It lets you borrow what you need, when you need it, up to a certain limit.
Ah, got it. Makes sense, thanks!Also, you only pay interest on the actual amount of money you borrowed in your LOC. With a regular loan, you get one lump sum of money and you start paying interests on the entire amount. A LOC is much more flexible in the sense that you are free to borrow and reimburse whenever you want, up to your LOC limit.