Distinction between:
Overdraft and Cash Credit.

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Solution

Overdraft Cash Credit
1) Meaning:
It is a credit facility given to current account holder to draw more than the credit balance in his account, subject to overdraft limit sanctioned. 1) Meaning:
It is a loan facility given by a bank in which certain amount is called in the account of the customer.
2) Duration:
Overdraft is a temporary loan given for a short period. 2) Duration:
Cash credit facility is for longer period than overdraft facility.
3) Interest:
Interest is changed on the actual amount overdrawn. 3) Interest:
Interest is charged on the amount actually withdrawn.
4) To whom facility given:
Overdraft facility is given only to current account holder. 4) To whom facility given:
Cash credit facility is given to regular bank customers and even to outsiders.

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