Loan vs. Credit

What is the difference between credit and a loan? Do these two terms mean the same thing?

The term "credit" is normally used when goods or services are provided before payment is made.

Example 1: You use your phone but only pay the bill at the end of the month. The phone operator provides its services throughout the month in good faith, expecting that you will pay the money you owe when the time comes.

Example 2: You use a credit card to pay for goods and services on credit. Your credit card's issuer pays for the purchases you make throughout the month expecting that you will either pay for those purchases at the end of the month or pay interest on outstanding debt.

The term "loan" generally refers to money provided with the understanding that it will be returned at a later date, either as a lump sum or in regular installments.

Example 1: A friend lends you 3000 francs to buy a car, with the understanding that you will pay back the money as soon as you are able to.

Example 2: A bank lends you $10,000 francs to buy a car, but only after you agree to pay back $500 francs per month for 20 months, plus another $1000 francs of interest.

More on this topic:
Swiss personal loan comparison
Swiss credit card comparison