A loan to a customer with a cheque account at a bank in which the account is allowed to go into debit is

Assessment: JAMB UTME - Commerce - 2014 Subject: Commerce

Question 1 Report

A loan to a customer with a cheque account at a bank in which the account is allowed to go into debit is
Answer Details
An overdraft is a loan facility that allows a bank account holder with a cheque account to withdraw more money than they have in their account, resulting in a negative balance. Essentially, the bank is allowing the account holder to borrow money from the bank with the understanding that they will repay it within a specified time period and with an agreed upon interest rate. Overdrafts are useful for covering unexpected expenses or short-term cash flow problems.
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