Published: 03 Dec 2017 › Updated: 03 Dec 2017
* Difference between Bank overdraft and bank loan.
- Customers must have a current account to obtain a bank overdraft whereas there is no need to have an account to obtain a bank loan.
- There is less formalities to obtain an overdraft whereas there is a complex formalities required to obtain a bank loan.
- Interest is charged on a daily basis for overdraft whereas interest is charged on a yearly basis for bank loan.
- Bank overdraft is a short term source of finance whereas bank loan is a long term source of finance.
- Interest rate is higher in bank overdraft whereas interest is lower in bank loan.
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