Working Capital
What is Cash Credit (CC)? Meaning, Interest Rates & Eligibility in India
Sep 2, 2026
Cash credit is searched over 8,000 times a month in India — yet most business owners still aren't sure how a CC account actually works, or whether it beats an overdraft. Here's the complete picture.
What is cash credit? (CC meaning in banking)
Cash credit (CC) is a short-term, revolving working capital limit a bank sanctions against your business's current assets — primarily inventory and receivables. Instead of a lump-sum loan, you get a CC account (a current account with an approved limit) and withdraw only what you need, when you need it.
- Interest only on usage: You pay interest on the amount drawn, not the full sanctioned limit.
- Revolving limit: Repay and redraw freely within the limit during the year.
- Annual renewal: The limit is reviewed every 12 months based on your stock statement, turnover and banking conduct.
Cash credit interest rates in India (2026)
CC loan interest rates typically range from 9% to 14% p.a. depending on your bank, turnover, credit profile and collateral. Public sector banks price CC lower for strong balance sheets; NBFCs move faster but price higher. Because interest accrues only on the utilised balance, a well-managed CC is often 2–4% cheaper in real terms than a term loan of the same size.
Cash credit eligibility & documents
- Business vintage of 2–3 years (some lenders accept 1 year for strong profiles)
- Turnover aligned to the requested limit — typically 20–25% of annual turnover as drawing power
- GST returns, ITR for 2–3 years, 12-month bank statement
- Stock and book-debt statements for drawing power calculation
- Collateral: hypothecation of stock/receivables, often plus property collateral for larger limits
CC vs overdraft: which one do you need?
Cash credit is secured primarily against stock and receivables — ideal for traders and manufacturers. An overdraft (OD) runs against your current account, FD or property — better for service businesses and professionals without large inventory. Many MSMEs benefit from running both.
How to apply for a cash credit loan
The fastest route is to get your drawing power and eligibility assessed across multiple banks at once — rates and structures vary widely. Moneymax compares 48+ banks and NBFCs and can tell you your indicative CC limit within one working day.