Signature Loans Vs. Lines of Credit

For those new to certain financial areas, certain terms can be a bit confusing. One such example is the difference between a personal or signature loan and a line of credit – both options can add funds to your financial profile, but they’re very different things in some of their finer details.

At Utah Money Center, we’re here to help with personal and signature loans anytime you’re in need. Here are some basics on the differences between signature loans and a line of credit.


The first difference here is in the amounts that are allowed under these different formats. The minimum for most personal loans is $3,000, but for most lines of credit, it’s higher, usually $5,000. Maximums for lines of credit will generally stretch longer, but this is for a practical reason – lines of credit can stretch much further into the future than a signature loan, which is relatively short-term. The max you can borrow in a personal loan will depend on factors like your personal finances and your credit score.

Interest Rates

With a personal loan, you’ll often have the ability to choose between a fixed or variable interest rate, which can matter for many people. With a line of credit, you do not have this option and only variable rates are allowed.


A personal loan is paid to you directly and immediately, in a single lump sum as soon as the loan is approved. By contrast, a line of credit is reusable – once you’ve been approved, you can continue using it and paying it down into the future.

Repayment Options

You pay a combination of principal and interest with a personal loan, and you’ll be allowed to choose between weekly, bi-weekly and monthly payment approaches. With a line of credit, you only pay interest on the amounts you use, rather than the entire line. In both cases, there can be penalties for not paying the full amounts back by the end of a term.

Secured Vs. Unsecured

Secured loans are backed by collateral, with higher borrowing amounts and lower interest rates. Unsecured loans can be approved more quickly, but amounts will be lower and rates will go up. Both personal loans and lines of credit can typically swing either way here.

Want to learn more about the differences between a signature loan and a line of credit, or interested in our cash and car title loans? Speak to the brokers at Utah Money Center today.