The Probert Encyclopaedia of Money

OVERDRAFT

An overdraft is a loan made to a customer with a cheque account at a bank or building society, in which the account is allowed to go into debit, usually up to a specified limit (the overdraft limit) . Interest is charged on the daily debit balance. This is often a less costly way of borrowing than taking a bank loan because with an overdraft, credits are taken into account.
Research Overdraft