Cash Credit vs. Overdraft: Know the Difference

At first glance, cash credit and overdraft may seem the same but there definitely are differences. Continue reading to find out the difference between cash credit and overdraft.

Having a crisis and needing additional financial help is quite common and to solve this, a loan can be taken. But what if availing a loan is not possible or the amount is not enough? 

Overdrafts and cash credits are two other options that offer financial assistance and relief.

Cash Credit vs. Overdraft - At a Glance


Cash Credit 



Offered to companies to help them maintain their working capital

Generally used for short term obligations and can be availed by both individuals and businesses

Interest Rate

  • Interest rate is relatively lower than overdraft and calculated on a monthly basis

  • Interest is calculated on the entire amount withdrawn

  • Interest rate can be higher and is calculated on a daily basis

  • Interest is calculated only on the amount availed


The duration varies based on the lender but can be a year

The duration can range from weeks to months based on the lender


A new account will have to be created

Existing account can be used

CashCredit Vs OverDraft

What is Overdraft?

An overdraft is a credit facility offered by lenders such as private and public sector banks that allows you to withdraw an amount that is greater than your existing account balance up to a certain limit. 

This is a great option for short term requirements especially business expenditure such as those needed for new machinery or equipment. Ideally this amount should be used for expenses that can be repaid soon.

Salient Features of an Overdraft

Types of Overdraft Facilities

There are two types of overdraft facilities - secured and unsecured. 

To get a secured one, you have to pledge an asset as security to the bank such as property, deposits, or shares. If you fail to repay your debt, the bank will have the power to take over the pledged asset and sell it. If the amount after selling your asset is less than the amount you withdrew, you will have to pay the difference.

An unsecured one does not require any collateral but the amount offered will depend on your income.

What is Cash Credit?

A cash credit on the other hand is a facility that is designed keeping in mind the needs of small and medium business owners. 

It is a short-term loan that can help business owners in meeting the working capital needs of their business. Generally, cash credit is a facility that is offered to business owners and not to individuals. 

Salient Features of Cash Credit

Does Money View offer Cash Credit or Overdraft?

Money View does not offer overdraft or cash credit facility. However, we do offer an alternate financing option which is a personal loan.

Our personal loans come with an easy application process, minimal documentation and flexible repayment terms. You can avail a loan ranging from Rs. 5,000 to Rs. 5 lakh within 24 hours of application approval. 

All you need to do is visit our website or download the app and apply today.


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