Difference between revisions of "Overdraft"

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A line of credit which is applied to a current account and may be drawn on demand.
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1. ''Facility''.
  
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An overdraft facility is a line of credit which is applied to a current account and may be drawn on demand. 
  
 
It is also known as a demand loan, as it is repayable to the bank on demand by the bank.
 
It is also known as a demand loan, as it is repayable to the bank on demand by the bank.
  
 
For this reason, it is risky to use overdrafts for core financing needs.
 
For this reason, it is risky to use overdrafts for core financing needs.
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2. ''Liabilities.''
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The amount by which an account is overdrawn.
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Also known as an overdraft balance.
  
  
 
== See also ==
 
== See also ==
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* [[Balance]]
 
* [[Bridge financing]]
 
* [[Bridge financing]]
 
* [[Concentrate]]
 
* [[Concentrate]]
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* [[Facility]]
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* [[Liabilities]]
 
* [[Overdrawn]]
 
* [[Overdrawn]]
 
* [[Revolving credit facility]]
 
* [[Revolving credit facility]]

Revision as of 14:42, 15 April 2020

1. Facility.

An overdraft facility is a line of credit which is applied to a current account and may be drawn on demand.

It is also known as a demand loan, as it is repayable to the bank on demand by the bank.

For this reason, it is risky to use overdrafts for core financing needs.


2. Liabilities.

The amount by which an account is overdrawn.

Also known as an overdraft balance.


See also