Credit limit is the maximum borrowing amount allowed by a lender.
Detailed Explanation
Credit limit refers to the maximum amount a borrower can use on a credit card or overdraft account. It is determined based on income, credit score, repayment history, and lender policies. Proper utilization of credit limit helps maintain a healthy credit score.
Example
"If your credit card has a limit of ₹1,00,000, you can spend up to that amount. If you already used ₹40,000, your available credit is ₹60,000."