By Nicole Dow | NerdWallet Personal loans and personal lines of credit are both helpful tools to cover large expenses. These financing options have similar benefits, like no collateral requirements and low rates for well-qualified borrowers, but deciding which is right for you comes down to how you prefer to receive and repay the funds. Learn the similarities and differences between personal loans and personal lines of credit to determine which is right for your plans. Personal loans and lines of credit: How they’re similar Personal loans and personal lines of credit are typically unsecured, meaning you don’t have to pledge an asset as collateral in order to borrow.