An overdraft loan is a form of revolving credit which is made available by banks to holders of certain types of accounts. Bank account holders can overdraw their account up to a predetermined limit. Interest is charged on the outstanding balance.
Overdraft loans can normally be repaid in full at any time without following an amortization schedule.
Many Swiss banks provide overdraft loans with their private accounts and business current accounts. Overdraft loans are not provided with Swiss savings accounts.
Overdraft loans provide a convenient and flexible way to access money and allow for greater liquidity. However, they often have low limits and interest rates can be high. Personal loans and business loans – which may also be provided as cash loans with no need for a special bank account – provide an alternative to overdraft loans.