Cash credit: the true cost.
Interest, unused-limit charges and renewal fees on your working capital limit, in one yearly figure.
What a cash credit really costs
Interest is charged only on what you use, but many banks also charge a commitment fee on the unused limit and a yearly renewal or processing fee. This calculator adds these up and shows the effective rate on the money you actually use.
How to use it
- Enter the sanctioned limit (in ₹ crore), your average use and the rate.
- Add the unused-limit charge and the renewal fee under More options.
- Use the result to compare your bank's terms with a takeover offer.
Questions.
How can a business get a lower cash credit rate?
A better external rating, more collateral, more business with the bank, and competing offers from other banks all help. Ask at renewal.
What is a commitment charge?
A fee some banks charge on the part of the limit you do not use, to cover the cost of keeping it available.
Can I move my limits to another bank?
Yes. Banks routinely take over working capital limits. Compare the full cost, including processing and security creation charges.
Want a lower rate?
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