Overson, 19, will now hope to make his Barrow debut against Alfreton Town this weekend.
The full back enjoyed similar loan spells at Vauxhall Motors and Bradford (Park Avenue) last season.
Overson joined the Bantams last summer, signing a two-year deal at the Coral Windows Stadium following his departure from Championship side Burnley.
He has yet to make a first team appearance for City but featured on a number of occasions for the reserves.