Comparing Personal Loans and Lines of Credit

There are a number of reasons why you may need to borrow money. Whether you’re looking to renovate your home, consolidate your debt or simply want to take that much deserved vacation, it’s important to find the right borrowing option.

What is a personal loan?

If you are interested in making a large, one-time purchase with the option of a fixed or variable interest rate, a personal loan may be the right option for you. Features of a personal loan include:

  • Type of disbursement: Lump sum

  • Interest rates: Fixed or variable

  • Loan amount: You have to borrow at least $3,000 with a personal loan. The maximum you can borrow will depend on your credit score and other factors.

  • Repayment options: Choose from weekly, bi-weekly, semi-monthly and monthly payments. Your payments will be a combination of principal and interest.

  • Secured or unsecured: Secured loans are backed by your collateral either by property or investments, resulting in a higher borrowing amount and lower interest rate, whereas with unsecured loans they typically have a faster approval process. Learn more about secured and unsecured personal loans.

What is a personal line of credit?

If your borrowing needs vary, and you want to make on-going purchases, a personal line of credit is probably a better fit. Features of a personal lines of credit include:

  • Type of disbursement: A personal line of credit is reusable. Once you are approved for it, you can access any portion of the credit line at any time.

  • Interest rates: Variable

  • Line of credit amount: Borrow as low as $5,000

  • Repayment Options: You pay interest on the amount you use, not the entire credit limit as you do with a personal loan. No matter how much you borrow, all of it plus interest must be repaid by the end of the term.

  • Secured or unsecured: Personal lines of credit can be secured or unsecured. Securing your line of credit by property or investments typically results in a lower interest rate and higher credit limit.

Where can I learn more about bank loans for specific purposes?

While this basic information holds true for most loans and lines of credit, there can be some variation depending on what the loan is used for. For example, there are special lending products for education, home and car needs. Learn more about these bank loans and lines of credit here:

Apply for a personal loan or line of credit with CIBC

After you’ve decided which option is right for you and your financial situation, contact CIBC to receive more information. You can call a CIBC advisor at 1-866-525-8622, or start your loan application online.


This information is not intended to be and should not be relied upon as financial advice. Speak with a CIBC advisor for details about CIBC lending products. Personal lending products and residential mortgages offered by CIBC are subject to CIBC's lending criteria and credit approval.

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