loan account

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An account opened by a bank in the name of a customer to whom it has granted a loan, rather than an overdraft facility. The amount of the loan is debited to this account and any repayments are credited; interest is charged on the full amount of the loan less any repayments. The customer's current account may be credited with the amount of the loan. With an overdraft facility, interest is only charged on the amount of the overdraft, which may be less than the full amount of the loan.

Subjects: Financial Institutions and Services.

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