Personal loans are what most people think of when they think of the word "loan." Members who take out personal loans receive the full amount of cash all at once. Then they repay that loan over a period of time at a set interest rate.

Personal loans generally offer:

• Full amount of money loaned up front
• Fixed interest rates
• Payment term periods
• Reliable repayments that won't change
• Interest rates may be lower than credit card rates

Personal lines of credit are more like credit cards. Members who obtains a line of credit receive access to a specified limit of funds, much like a credit card limit. Lines of credit may be good solutions if members don't know exactly how much they'll need, or when payments need to be made in stages. And the best part? If the money isn't spent, it doesn't need to be repaid.

Personal lines of credit usually offer:

• More flexibility than personal loans
• Quick access to funds
• Interest rates that are lower than credit card rates
• Variable rates

However, personal lines of credit usually do not offer:

• Fixed rates — rates are usually variable, which means they may change over the period of repayment
• Reliable repayment — when interest rates change, the repayment amount also changes
• Grace periods — unlike credit cards, interest often begins to accrue as soon as the funds are used. Making on-time payments doesn't eliminate interest debt.