Key Points
When contemplating securing funds from a bank, two primary choices typically emerge - term loans and overdrafts..
The interest rate is typically fixed and tends to be lower than that of overdrafts, contingent on factors like the type of loan, amount, and credit score..
While an overdraft shares certain features with a loan, such as interest charges and a credit limit, it operates differently in terms of repayment flexibility and the accrual of interest...
Extended repayment durations and fixed interest rates commonly lead to lower overall interest costs in term loans, especially when compared to overdrafts for significant amounts..
Thoughtfully evaluate the amount required, your ability to repay, creditworthiness, and interest rates before making a choice between a term loan and pursuing an overdraft...
