Credit is a financial transaction in which a person or entity (creditor) makes an amount of money available to another individual or legal entity (debtor). The latter must repay the amount drawn plus the corresponding interest within the agreed term. In a loan, an amount up to a certain limit is made available to the debtor, and he draw down all or part of this money and will only pay interest on the principal drawn down.
The customer only pays interest on the money drawn down, not on the total, although it is normal for him to pay a commission on the unused part.