Cash Credit (CC) is a short-term loan offered to self-employed customers and businesses to meet their working capital requirements, whereas an Overdraft facility is credit funding offered by banks to individuals and companies to withdraw money from the banks in which they have accounts, even if their account balance is low, zero or below. Cash Credit and Overdraft are referred to as credit limits sanctioned by lenders. Both of these financial instruments are used to borrow money against hypothecation of inventory or financial statements.

Generally, Cash Credit and Overdraft are considered as similar funding products, still, there are 9 differences between both of these financial instruments which we need to understand: