Is using an overdraft worse than a loan?

[aquaelephant]

DD has a no interest overdraft joined to her student account and needs to pay her car insurance. She can either pay it up front using that overdraft or pay it back monthly doing the loan option with the company but obviously a bit of interest goes on it. Is she still better off doing that vs having money from an overdraft though?

If it's interest free and she can clear it before interest begins to be charged then use the overdraft. A traditional overdraft though is one of the most expensive ways of borrowing

It can be really difficult to climb out of an overdraft once you're in it and further unexpected payments push you further into it.

Well if she has to pay interest on the loan but not the overdraft then of course she is better off with the overdraft, assuming there are no other factors to consider.

You choose the option where you pay less interest, whichever that is, it will depend on your specific loans/ bank accounts.

Avoid using overdraft facilities at all costs.