A loan is an appropriate solution if funding of an unforeseeable amount is required for a longer period of time. This might be the case, for example, when financing major investments. The loan is repaid either on a specific due date or in contractually agreed instalments.
Unlike a fixed loan, a line of credit is not based on a specific amount that is borrowed. The credit limit is determined by the borrower's current account. Where necessary, the borrower may borrow up to this limit, withdrawing any amount at any time within the line of credit that has been granted.
