What Is the Definition of a Bank Overdraft?


An overdraft is a loan arrangement between the borrower and the bank whereby the bank extends the credit to a maximum amount against which the customer can write cheques or make withdrawals. It refers to the amount of money borrowed that exceeds the deposits.
1 Additional Answer
A bank overdraft can refer to a loan arrangement under which a bank extends credit up to a maximum amount against which a current account customer can write checks or make withdrawals.
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