Bank Overdraft

What is a Bank Overdraft?

A bank overdraft is the limit you can borrow from an account. When

repaying you must pay a service charge.

Advantages.

• Short term borrowing• Interest is only paid on amounts

borrowed• Flexibility can change the amount

borrowed within limits

Disadvantages.• It cannot be used for large borrowing•Rate of interest is higher than loans•The bank can change limit at any time or ask for money to be paid back quicker

By Sophie, Ben and 4ndii b4bii