Distinguish between: 3. Cash credit and overdraft facility

Distinguish between:

3. Cash credit and overdraft facility

Answer: 

Bases
Cash credit
Overdraft facility
Definition
A loan taken in the form of cash by anyone from the bank against some securities is called cash credit.
Commercial banks allow their customers to withdraw an amount from the bank in excess of their balance.
Drawers
Anyone can take a cash loan from banks against some securities.
Only current account holders can avail this facility.
Interest rate charged
They charge higher rates of interest against a cash loan.
They charge minimal rates of interest against an overdraft.

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