Understanding cash credit and overdraft loans at loanzBazar
Cash credit is more common for business accounts, and it usually demands some type of collateral. Overdrafts, on the other hand, allow account users to maintain a negative balance without paying a significant overdraft fee.
Financial organizations provide their customers with two types of short-term financing: cash credit and overdraft. When there are insufficient funds in checking accounts, both are utilized to prevent cheques from bouncing or debit cards from being denied. The main distinction between these types of loans is how they are secured.
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Apply for a cash credit loan and receive funds within 24 hours of approval at loansBazar. With the least requirement, minimum eligibility and just a few documents get your cash credited to your bank within hours. Secured overdrafts typically take one to three months to arrange, however, unsecured overdrafts can be accessed instantly or in as little as two weeks.
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Why is LoanzBazar best to take cash credits/ overdrafts from?!
LoanzBazar guarantees the fastest cc approval and transfers within 24 hours after screening the required documents and your application. Overdraft, however, takes a little longer but with LoanzBazar it will also be processed fast.
Repayment is limited to the amount spent from the available limit because interest is levied on the daily closing balance rather than the maximum borrowing limit. The payback time for the amount borrowed on credit is similarly limited to 12 months or less because it is a short-term loan. An overdraft, unlike loans or credit cards, does not have a repayment schedule, thus it is up to you to pay it off.
At LoanzBazar you can take a cash credit from anywhere between Rs 50,000 to Rs 10,00,000 and use it to meet day-to-day needs, expand operations, purchase new equipment etc.
A one-year repayment period is typical for cash credit loans. The repayment period for an overdraft facility can be monthly, quarterly, half-yearly, or yearly.
When you are opting to take a cc/overdraft with LoanBazar you won’t be worrying about documents. You just need to show some basic documents and your loan will be credited to your bank.
Financial organizations provide their customers with cash credit and overdrafts to prevent returned payments. When there are insufficient funds in checking accounts, both are utilized to prevent cheques from bouncing or debit cards from being denied.
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CC/overdrafts rate of interest are usually different at different banks. The rate of interest for overdrafts is higher than for cash credits. The lowest interest rate for cc is charged in ICICI at 10.4% to 11.5% p.a. Whereas the lowest interest rate for overdraft is charged at SBI Starting at 9.65%.
| Bank Name | Rate of Interest for Salaried Employee |
|---|---|
| HDFC Bank | 10.99% - 17.85% |
| Axis Bank | 11.99% to 24% |
| ICICI Bank | 10.99% - 17.85% |
| Standard Chartered Bank | 11% - 16% |
| IndusInd Bank | 14% - 16% |
| Kotak Bank | 11.50% - 24.00% |
| Bajaj Finance | 14.25% - 16.75% |
| HDB Finance | 14% - 21% |
| Fullerton Finance | 13.00% - 24.00% |
| State Bank of India | 11.00% - 17.65% |
| IDFC Bank | 10.99% - 17.85% |
| IDFC Bank | 10.99% - 17.85% |
| Tata Capital | 13.50% - 18% |
| Yes Bank | 12.50% - 16.00% |
The borrowing limit for cash credit is based on stock volume and inventory whereas in overdrafts the borrowing limit is based on financial statements and security deposits.
Ye cash credit is a short-tenure loan amount which you can return within a year.
A CIBIL score of 750 or above is required for cash credit.
To be eligible for an overdraft, an applicant must have a current account with the bank. Only the amount that has been utilized is subject to interest.
Businesses can take out cash credit loans to borrow money from their bank account over their account balance as many times as they wish, up to a pre-determined borrowing limit. However, interest is only levied on the amount borrowed, not on the total amount borrowed, unlike other loans.
