What is overdraft?
In simple terms, overdraft is a financial facility offered by banks to help account holders withdraw money from their savings and current account, even if the account balance is below the minimum required balance or zero. This limit is assigned to each customer depending on his credit score, repayment history, account value and others. This facility is well known as short-term cash loan facility that the customer can utilize at any point in time upto the assigned credit limit. However, this facility can be availed by paying the interest on the utilized credit amount.