Application letter and cover letter are both kinds of formal letter. An application letter is written to secure employment in an organisation. The language is strictly formal and it establishes and applicant’s interest in a particular job or position in an organisation. It is used to emphasize one’s most relevant qualifications and experiences and adding more quality to one’s résumé. Cover letter, on the other hand, is also a kind of formal letter that introduces another document accompanying it (for instance, curriculum vitae). It is used as a tool of persuasion that one is most suitable or efficient for a particular post or job. Often, people use the terms “Application letter” and “cover letter” interchangeably, nevertheless, there are subtle differences between the two forms of letter. 

Some of the differences between the two letters are highlighted below: 

1. An application letter can stand on its own whereas a cover letter cannot: When applying for a job, you can send only your application letter to express your interest for the job. A cover letter, as the name suggests, is only meant as a cover for your résumé. It’s meant to introduce you. It needs to be accompanied by your curriculum vitae. Application letter serves the purpose of both a cover letter and a résumé. 
2.   Cover letters typically contain a brief introduction whereas application letters contain an extensive introduction: This is so because the application letter is meant to serve the function of the curriculum vitae also. They contain educational history, work and professional history of the employee.  
3. Application letters contain in-depth information about candidate skills and qualities, work history, educational background, professional experiences whereas cover letters are merely used for submitting the documents outlined an application letter. 
4. Application letters outline qualifications, skills and abilities, strengths, and work history as related to the job applied for. A cover letter can omit some specific details, though it must include contact information and state why you’re applying for that particular job and why you’re good for it.