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An
overdrawn balance on cash at bank account. Bank overdrafts are a very
common form of borrowing in the UK. The bank and the borrower agree
upon the maximum size of the overdraft, but interest is only charged
to the extent that the overdraft is used. In essence it is a loan at
your disposal where you can decide exactly how much of it you
wish to use, and can be easily paid back by depositing
appropriate funds in the underlying account. Overdrafts are not
commonly practiced by US banks.
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