overdraft

Overdraft

An instant extension of credit from a lending institution.

Notes:

For example, if you have an overdraft account, your bank will cover checks which would otherwise bounce. You pay interest on the outstanding balance of the loan much like any loan.

See also: Bank, Credit

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Overdraft

Provision of instant credit by a lending institution.

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overdraft

A draft for more than the balance in the account on which the draft is drawn. A bank may honor an overdraft, depending on the importance of the customer and on prior arrangements (if any) to cover overdrafts. See also NSF check.