MADISON, Wis. (1/7/16)--Bankrate.com tapped the Credit Union National Association (CUNA) for advice on differentiating between a personal loan and a personal line of credit.

A personal line of credit functions much like a credit card, the Bankrate article said. The borrower is extended a maximum amount of credit to use over a period of time. Payments are made based on the amount borrowed against the overall amount of credit, similar to a credit card.

By contrast, a personal loan is a specific amount, which is disbursed to you at once in a lump sum. It has a fixed or variable interest rate, and a fixed repayment term.

Consumers with a good idea of the amount they will need to borrow may choose to go with a personal loan, CUNA’s Michelle Dosher told Bankrate. Dosher is CUNA’s consumer education department managing editor.

On the other hand, a personal line of credit is more suitable for those who have borrowing needs that vary.

"Once you're approved for that line of credit, then you can access a portion of that credit line at any time; you don't have to use the amount of money as a lump sum," Dosher said.