A CC Limit, short for Cash Credit Limit, is a pre-approved borrowing limit provided by banks or financial institutions to individuals or businesses. Here's an overview:
Key Features:
- Pre-Approved Credit: Banks grant a predetermined credit limit based on the borrower's creditworthiness, income, and financial stability.
- Flexible Usage: Borrowers can access funds up to the specified limit as needed. It operates similarly to a revolving line of credit.
- Interest Payment:Interest is charged only on the amount utilized, not on the entire credit limit.
- Collateral: Depending on the type (secured or unsecured), some CC limits may require collateral or assets as security.
- Renewable:Once the borrower repays the utilized amount, the credit limit becomes available again, allowing for continuous borrowing within the specified limit.
