This means that we could refuse a payment if you have insufficient funds in your account or ask at any time for immediate repayment. Every month, we'll review your account to make sure your overdraft borrowing is suitable, based on credits to your account. If we feel that your overdraft borrowing may be too much when compared to credits to your account, we'll recommend that you pay in an appropriate amount each month.
When we get in touch, we will also explain how we may be able to help, in the short and long term, if you're unable to pay this amount. You can find out your overdraft limit by logging onto online banking or the Mobile Banking app.
You can also see your limit in the top right hand corner of recent statements. If you'd like us to increase, decrease or cancel your limit, you can do this through online or mobile banking.
You can also contact us by phone or go to a branch. Changes to your overdraft limit are subject to status. Whether you have an arranged overdraft facility or not, most of our accounts include an interest-free buffer.
A higher amount is included with our Student, Graduate, Premier and Jade accounts. It takes into account not just the interest, but also any other charges that may have to be paid and any interest-free amount. We will report accounts that have been in a continuous unarranged overdraft for 30 or more days to Credit Reference Agencies, which could negatively affect your credit file and your ability to get credit in the future.
We will also report, as standard, any arranged overdraft limit and overdraft usage for all current accounts. If you don't provide your mobile number, or let us know when you've changed it, we won't be able to send you text alerts to make you aware of your overdraft usage. You can opt out of the arranged or unarranged texts at any time by phone, or by calling into branch.
Overdraft calculator See how much it could cost you to use a personal overdraft facility on your account. Current accounts. Tell us about your overdraft needs. Calculator assumptions. Glossary of terms. An overdraft is a credit facility that allows you to borrow more money than you have in your current account.
Previously, there were two types of overdraft, and these carried different interest rates and fees:. Sometimes called authorised or formal overdrafts, these are agreed with your bank in advance up to your overdraft limit, which will be reviewed on a regular basis. Since 6 April banks have not been allowed to charge more for unarranged overdrafts than for arranged overdrafts.
Banks are also banned from charging daily or monthly overdraft fees. Banks and building societies changed their overdraft structure to comply with new Financial Conduct Authority FCA rules on overdrafts from April Many lenders are charging customers as much as Starling uses TransUnion and Equifax to decide what overdraft rate to offer customers.
Pricing will be reviewed on a monthly basis though your rate will only change once in any 12 month period. Monzo will use TransUnion to decide what overdraft rate to offer customers. The bank told Which? Customer Score: Our rating for customer satisfaction, based on feedback from real customers.
The score is made up of a customer's overall satisfaction with the brand, and how likely they are to recommend that brand to a friend. We surveyed 4, members of the general public in September Our full table includes scores and star ratings for all banks.
Some banks offer interest-free 'buffers' which means you don't face any charges if you borrow up to this amount:. Mobile and online-only bank Starling offers the cheapest overdraft on the market but only if you have an excellent credit score. Use the bank's eligibilty tool before applying for the account to see whether you are likely to be offered an overdraft. Starling uses credit reference agencies TransUnion and Equifax to help it decide how much to charge you and rates will be reviewed on a monthly basis though your rate will only change once in any 12 month period.
Starling is a Which? Recommended Provider. It received the highest customer score of any bank in our survey and offers current account perks including free spending and cash withdrawals abroad. It used to charge a market leading overdraft rate of This change has meant the cost of borrowing has more than doubled for some customers. First Direct is a Which? Recommended Provider , receiving a high score in our customer survey, and offering perks including a regular saver account.
You can change your overdraft limit from the app at any time. If you want to cancel the overdraft you must pay the amount you borrowed back, plus any interest owed. It doesn't proactively change anyone's overdraft rate so if your credit score improves, you would need to pay off your overdraft and re-apply to get a better deal. Although Monzo received a very high customer score in our banks survey , it missed out on Which?
Though Nationwide's FlexDirect account offers an interest-free overdraft for a full year, we haven't included it in our table because after this, you'll be stung with a rate of You can use the building society's eligibilty tool before applying for the account to see whether you are likely to be offered an overdraft.
Don't switch to this account if you aren't confident you can clear the overdraft debt within a year. But since the FCA's new rules came into force in early , the vast majority of banks now charge Lloyds is charging some customers an eye-watering Your bank will charge you interest, and sometimes other fees on top.
This includes going over the limit of an authorised overdraft. Get started with Money Navigator , giving you instant help based on your circumstances. Get started. Major changes affecting your overdraft were introduced in April Interest on all overdrafts is now charged at a single annual interest rate APR , making it easier to compare charges between accounts.
Contact your bank. Banks might, for example, reduce or waive interest, offer a continuation of overdraft borrowing at the current rate of interest, or agree on a repayment programme, which might include a personal loan. Speak to your bank or building society as soon as possible. If you feel vulnerable for any reason, explain your circumstances and your provider is obliged to take this into consideration.
If you find yourself dipping into your overdraft frequently, you might want to use our Budget planner to take control of your money. Overdrafts can be useful for some people. They can help you avoid fees for bounced or returned payments.
They could help you save money. Use our Bank account fees and charges comparison tool to see all the fees and charges that apply to bank accounts — it shows everything from overdraft fees to foreign cash withdrawal charges.
Comparison websites can help you find a current account tailored to your needs. Yes, you can switch using the Current Account Switch Service. Make sure you check the charges and overdraft rules for each account. It may seem obvious but keeping track of your account balance is one of the best ways to avoid overdraft costs.
If you then get an unexpected cost, you can still use your overdraft to pay for it. To lower your overdraft as quickly as possible, cutting back in other places will help you free up money. The money you save can then be used to pay off your overdraft.
Switch to a bank account with lower overdraft charges. If you often dip into your overdraft shop around for one with the lowest charges. You may even be able to switch to an account with a switching bonus, which will help you to clear your overdraft.
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