Question
Shown the difference between bank overdraft and cash credit.
| Points | Bank Overdraft | Cash Credit |
| Meaning | The facility given to the current account holder to withdrawn more than balances amount is called overdraft. | Big amount of overdraft facility is granted for a long-time is called cash credit. |
| Who can get? | The facility given to the current account holder only. | This facility is given to any type of account holder. |
| Objective | The aim of overdraft is to satisfy temporary financial requirement. | The aim of each credit is to satisfy long-term financial requirement. |
| Amount | Overdraft is used for the amount of small and medium type of advances. | For the advances of big amount cash credit is used. |
| Guarantee | Overdraft facility can be obtained against personal guarantee of account holder. | Cash credit facility can be obtained against personal guarantee or assets. |
| Interest | Bank earns small interest on overdraft. | On cash credit, bank earns more interest. |
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