Bank loan is an amount borrowed by a firm or an individual from a bank. On the other hand, bank overdraft is a facility provided by the banks to a few reputed users under which the accountholders can withdraw in excess of the money what actually exists in their accounts. For example, suppose you have Rs 10,00,000 in your account. If your bank provide you the bank overdraft facility, then you can withdraw more than this amount say Rs 11,00,000 from the bank.
Accounting Treatment of Bank LoanBank Loan is shown on the Liabilities Side of the Balance Sheet.
Accounting Treatment of Bank OverdraftSimilar to the bank loan, bank overdraft is also shown on the Liabilites side of the balance Sheet