Black Overdrafts Loan

Overdrafts Loan

Overdrafts can offer flexible borrowing to meet short-term needs. Personal loans are for fixed amounts and are more suitable for borrowing larger sums over a longer term. If you're considering borrowing, be sure you can afford the repayments.

Overdrafts are like a 'safety net' on your current account; they allow you to borrow up to a certain limit when there's no money in your account and can be useful to cover short term cashflow problems.

Some bank accounts have a free overdraft built in. If yours doesn't, you'll have to ask your bank for an authorised overdraft facility. Their decision will be based on your bank record and you may have to pay a fee to set it up. You don't have to use an authorised overdraft, but it's there if you need it and you won't pay extra charges for accidentally going overdrawn.

You have to pay back your overdraft plus interest. Rates differ between banks and can be fixed or variable. There may also be an arrangement fee and monthly charges.

Advantages of an overdraft

• An overdraft is flexible - you only borrow what you need at the time which may make it cheaper than a loan.
• It's quick to arrange.
• There is not normally a charge for paying off the overdraft earlier than expected.
  

Bear in mind that what starts out as a good deal may change - as may your business needs. It's worth reviewing your options regularly.