| Overdraft | Loan |
| A short term debt | A long term debt. |
| Does not require collateral security. | Requires collateral security. |
| Granted only to current account holders | Granted to any category of bank customers. |
| Repayable with short period of time. | Repayable within longer period of time. |
| Small sum of money is usually involved. | Larger sums of money are usually involved |
