Skip to main content Skip to main navigation
Skip to access and inclusion page Skip to search input

What is an overdraft?

A bank overdraft is a line of credit that covers your transactions if your bank account balance drops below zero. While we no longer offer new Personal Overdrafts, we have an alternative line of credit - Flexi Loan - which you may want to consider.

Note: Westpac no longer sells personal overdrafts.

As an alternative line of credit, you could consider our Flexi Loan

Bank overdraft definition

An overdraft facility linked to your everyday transaction account is an unsecured line of credit designed to cover short-term cash flow shortfalls.

Benefits of a bank overdraft

An overdraft allows you to access extra funds through your transaction account up to an approved limit, helping avoid overdrawn and dishonour fees. You can make withdrawals using your overdraft as you would with your transaction account once the account’s balance is $0 – it automatically triggers the overdraft.

Although Westpac no longer offers bank overdrafts, we do offer a line of credit called Flexi Loan, which is an alternative option to access funds, up to your credit limit, by transferring them into your transaction account to use any time.

Interest is only charged on the amount used (when fees and charges are paid on time). A monthly loan account fee may also be charged.

When is a bank overdraft not the best option?

They are not suitable for consolidating debt. Learn more here.

Things you should know

Westpac Debit Mastercard® Terms and Conditions (PDF 218KB)

BPAY® is a registered trademark of BPAY Pty Ltd ABN 69 079 137 518.