What is the difference between an open-end loan and a closed-end loan?

An open-end loan is a loan that does not have a fixed number of payments, a finance charge is only charged if there is an outstanding balance, and the amount available is replenished as payments are made. Examples of an open-end loan are credit cards or a Personal Line of Credit.

In contrast, an auto loan, which is an example of a closed-end loan, has a set number of payments, a finance charge is generally charged with each payment, and the amount available does not replenish when payments are made.