A Cash Credit ( CC ) is a short-term, flexible financing option for working capital needs, whereas a Term Loan is a fixed-term loan used for long-term investments.

Key Differences:

• Repayment & Interest: In a Term Loan, interest is charged on the entire loan amount, regardless of how much you use. In contrast, with CC, interest is charged only on the amount withdrawn and outstanding, not the full credit limit.
• Purpose: CC is meant for day-to-day operational expenses, while Term Loans are used for long-term business investments.

• A short-term loan known as Cash Credit is provided to financial institutions, corporations, and companies to meet their working capital needs. Conversely, an overdraft facility is a type of credit funding that banks provide to both individuals and businesses. Even if their account balance is insufficient, zero, or negative, it allows them to take money out of the banks where they have accounts.
• There are several parallels between overdraft and cash credit. For example, the interest rate is applied on the amount of money used rather than the total amount authorized for both.

Yes, a Cash Credit ( CC ) limit can be increased, but it depends on the bank's policies and your financial standing. To request a limit increase, you’ll typically need to submit a formal application along with supporting documentation, such as updated financial statements or business performance reports.

If your Cash Credit ( CC ) account becomes inactive, it may be classified as 'dormant' or 'inoperative', restricting your ability to make transactions, withdrawals, or transfers. Some banks may also charge inactivity or maintenance fees, which could reduce your available credit limit.