Cash Credit


Meaning of Loan –

      A loan is a form of accommodation provided by the bank to his customer who is in need of money. A bank grants loans after satisfying some conditions. It is an arrangement of advancing a sum of money on interest for a period Sometimes for a particular purpose as well.

Meaning of Cash Credit- 
         A cash credit is an arrangement by which a bank allows his customer to borrow up to a certain agreed limit against either a bond of credit by one or more sureties or certain other securities.


The loan can be withdrawn in full.

Cash credit is drawn by the borrower as per his convenience.


 The loan account closes as soon as it is repaid.

Cash credit is current account perpetuates


The loan is a temporary bargain. 

Cash Credit is continuous.


The loan, if repaid cannot be taken back. It needs a fresh sanction.

Cash credit is continuous and perpetuates for the period, which usually is longer one.


The loan is paid back either in full or on the regular interval in agreed installments.

Cash credit is repaid as per the convenience of the borrower on predetermined terms and conditions.


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