Credit is any sort of arrangement by which you obtain money, goods or services and agree to repay at a later date. Before a company lends you money, they will put in place certain safeguards to make sure that you will repay it.

A loan is a contract between parties regarding borrowing of funds that will be paid with agreed upon terms to finance a need.

Relatively few people have enough ready cash to buy a house, the majority of homeowners avail a loan for its purchase.