All loans are alike in some ways. You borrow an amount of money, called the principal, for a set amount of time, called the term, at a fixed or variable interest rate. Most loans are installment loans, which require regular payments, usually every month, until the full loan is paid back with interest. Some loans require the principal to be repaid all at once.
Loans can be secured or unsecured, depending on whether they are backed up by collateral (assets that the lender can take possession of if the borrower doesn’t make payments). For example, car loans and mortgages are secured loans. Your promise to repay the loan is secured by the car or house you’re buying. If you fail to make your payments, the lender can seize the car or house to recoup the money it lent you. Unsecured loans are backed up only by your promise to repay, which is why they normally come with higher interest rates.
Revolving credit refers to loans for which the amount borrowed changes over time, unlike non-revolving credit (regular loans), where you borrow one amount and then pay it back. With revolving credit, there’s a maximum you can borrow (usually referred to as credit limit), and a minimum payment you must make each month, but the rest is up to you. Credit cards and home equity lines of credit (HELOCs) are the most commonly used types of revolving credit.