What is Cash Credit (CC)? Meaning, Interest Rates & Eligibility in India

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

Indicative CC pricing on our panel runs 9.00% – 16.00% p.a. as on 10 July 2026, moving with the lender, your turnover, credit profile and the security offered. Public sector banks tend to price CC lower for strong balance sheets; NBFCs move faster but price higher. Because interest accrues only on the utilised balance, a limit that is drawn and repaid through the month can cost less in practice than a fully drawn facility of the same size — though the final rate is the lender's call. Current ranges across products are on our rates page.

Cash credit eligibility and documents

Criteria vary by lender, so treat the following as the shape of the assessment rather than fixed thresholds.

• Business vintage — most lenders look for a few years of operations, though strong profiles are considered earlier
• Turnover consistent with the limit requested, evidenced in GST returns and bank credits
• GST returns, income tax returns and financial statements, and twelve months of bank statements
• Stock and book-debt statements, which drive the drawing power calculation
• Hypothecation of stock and receivables, with property collateral commonly sought for larger limits

CC vs overdraft: which one do you need?

Cash credit is secured primarily against stock and receivables — suited to traders and manufacturers. An overdraft runs against your current account, an FD or property, which usually suits service businesses and professionals without large inventory. Many MSMEs run both. Our cash credit vs overdraft comparison sets the two side by side, and the overdraft explainer covers the OD side in detail.

How to apply for a cash credit loan

Get your drawing power and eligibility assessed against several banks at once, because structures vary as much as rates do. Start with our cash credit facility page for eligibility and documents, the wider working capital loan page if you are still sizing the requirement, or the business loan and MSME funding guide if you are choosing between facilities.

Moneymax Fingrow is a credit advisory and channel partner, not a lender. We assist businesses in applying with banks and NBFCs; approval, the sanctioned limit and the final rate are decided by the lender.