Description: An overdraft is a facility that allows an account holder to withdraw more money than they have in their account. This financial tool is commonly offered by banks and credit institutions, and it is used to provide customers with greater flexibility in managing their finances. The overdraft can be seen as a short-term loan, where the bank allows the customer to have a negative balance up to a predetermined limit. This limit is determined based on the customer’s relationship with the institution, their credit history, and other financial factors. The main features of an overdraft include the ability to access additional funds in times of need, although it usually incurs interest on the amount used. Additionally, it is important to mention that excessive use of the overdraft can lead to financial problems, as interest rates tend to be higher than those of other types of loans. Therefore, while the overdraft can be a useful tool for managing unexpected expenses, its use should be considered with caution and responsibility.
