The Difference Between Personal Loans & Personal Lines of Credit

personal line of credit

With soaring gas prices and inflation affecting your purchasing power, it might be a great time to implement a financial safety net to help you out. To assist you in accessing funds when you need the money, perhaps you’re considering a personal loan or line of credit. But what’s the difference between a personal loan and personal line of credit? Camino is here to help you better understand which option could be best for you, and your individual needs.

What is a personal loan and how does it work?

Personal loans enable you to borrow money to help you with a range of financial needs, from vacations, paying off high-interest credit cards and bills, to simply having extra spending money at your disposal. At Camino, as a not-for-profit credit union, we’re able to offer great rates and flexible terms.

With a personal loan, you’ll receive a one-time cash payment up front once you’ve been approved. You’ll pay the loan back in regular monthly installment payments plus interest – like a credit card, but with significantly lower interest rates. Depending on the terms of your loan, the funds that you borrow are repaid with payments for the life of the personal loan, which can range from a period of months to years. Typically the payments are at a fixed rate, so your monthly payment stays the same. How much interest you’re charged on a personal loan depends on several factors, such as your credit history, credit score, the amount owed, and the payback period.

Camino offers two types of personal loans:

  1. Share-secured loan: a secured loan that uses your deposits at Camino as collateral, which allows us to offer a lower loan rate.
  2. Signature loan: an unsecured loan that doesn’t require collateral, so the terms are more limited.

What is a personal line of credit and how does it work? 

With a personal line of credit, you can be ready to have the money on hand whenever you need it. Frequently, most people first think of personal loans as their only option, but a line of credit can be a great option as well, depending on your specific needs. 

A line of credit is a flexible loan that consists of borrowing a specific amount of money that you can access anytime and can either be repaid right away or over a specified period of time, at your discretion. With a line of credit, Camino offers fixed-rate loans with no application fees; you only pay interest on what you use.

Contact Camino to Help You with the Right Financing Option Today. 

Let Camino help you with your financial journey and help you better understand the benefits of a personal loan and line of credit. We offer a variety of loans to ensure you receive the proper support for the reason you are borrowing money. Each loan comes with different terms that help you determine what you are best qualified for. We want our members to find the best option that works for them. Please go online at, give us a call at 800-835-3400 to speak with one of our Member Advisors, or contact us for more information.