What context can I use each word in?
Learn when and how to use these words with these examples!
loan
Example
I took out a loan to pay for my college tuition. [loan: noun]
Example
She loaned me some money to buy groceries. [loaned: past tense verb]
credit
Example
I have good credit, so I was able to get a loan with a low-interest rate. [credit: noun]
Example
He used his credit card to buy a new TV. [credit: noun]
Good things to know
Which word is more common?
Loan is more commonly used than credit in everyday language, especially when referring to a specific sum of money borrowed. However, credit is more commonly used in financial contexts, such as credit scores, credit cards, and lines of credit.
What’s the difference in the tone of formality between loan and credit?
Both loan and credit can be used in formal and informal contexts, but loan may be considered slightly more formal due to its association with financial agreements and contracts.
