The primary difference between a line of credit and a short -term loan is
A) we borrow the entire amount with both the short -term loan and the line of credit.
B) we borrow the entire amount with the short -term loan, but borrow only what we need with the line of credit.
C) we borrow only what we need for the current month with both the short -term loan and the line of credit.
D) we make payments on the line of credit every month to insure that we will have good credit.

Question

Quizplus · Accepted Answer

The primary difference lies in the borrowing mechanism: with a short-term loan, the borrower receives the entire loan amount upfront and starts repaying it over time, whereas with a line of credit, the borrower has access to funds up to a certain limit and can borrow as needed, only paying interest on the amount borrowed.

The Primary Difference Between a Line of Credit and a Short