Bank Overdraft Loan

One sort of financial instrument that permits withdrawals from savings or current accounts even in the absence of funds in the account is an overdraft loan. Nearly all financial institutions provide this service, particularly banks and NBFCs. Overdraft accounts are a type of short-term credit that needs to be repaid within a predetermined time frame. Based on the terms and conditions set forth by the bank, lenders are required to charge borrowing costs, which borrowers must pay. Lenders usually impose fixed interest rates for overdrafts; they are not variable.