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Overdraft vs Cash Credit

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(Querist)
26 June 2023 Hi,

What is difference between Bank Overdraft and Cash Credit ? which is better ?
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
26 June 2023 CASH CREDIT IS A PERMANENT TYPE OF LOAN WHERE A SEPARATE LOAN ACCOUNT LIMIT IS GIVEN & BORROWER CAN AVAIL IT BUT IN CASE OF OVERDRAFT ,IT IS TEMPORARY ARRANGE MENT EXCESS OF CREDIT BALANCE OF CURENT ACCOUNT DEBIT IS ALLOWED ON REQUEST.
You can choose cash credit in case of permanent requirement, and for temporary requirement choose over draft.
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