1. Cashflow - you can draw on money when unexpected expenses arrive (or expected income doesn't).
2. Customer only pays interest when overdrawn
3. Bank has flexibility to review and adjust the level of the overdraft facility, perhaps on a short-term basis.
4. Easy to organise
5. HELPS IN KEEPING GOOD TRACK RECORD
6. TIMELY PAYMENTS:
It also aids in ensuring that timely payments are made and no late payments penalties are faced, as payments would be made even if there is no balance in the account.
7. You normally won’t be charged for paying off your overdraft earlier than expected.
8. It can be a cost-free safety net so long as you're not using it.
9. Overdraft can be effectively be used as a medium-term loan – the facility is simply renewed each time the bank comes to review it.
10. Only pay interest on what you borrow
11. LESS PAPERWORK:
Overdraft facility is usually easy to avail compared to long term loans which may require more paperwork.
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