An overdraft could be a handy safety net:

An arranged overdraft is when we agree to a limit that lets you spend a bit more money than you have in your current account. This could help you manage your money if you have to cover short-term expenses such as an unexpected bill.

For more support on the basics – from overdraft definitions to understanding overdraft costs – why not try our handy guide? We’ll also run you through the difference between arranged and unarranged overdrafts.

Find out how overdrafts work

An unarranged overdraft is when you spend more money than you have and you haven’t previously arranged an overdraft limit with us, or you have exceeded your existing overdraft limit.

We don’t charge fees for using an arranged overdraft – we only charge interest on the amount of overdraft you use. The interest you pay depends on the type of current account you have with us.

An Unpaid Transaction Fee of £1.55 is charged for a transaction that we return unpaid. A transaction (e.g. a Direct Debit) will be returned if the payment cannot be met from funds in your account or any unused arranged overdraft facility and we decide in our discretion not to make the payment.

Charges are accrued during a charging period. At the end of the charging period you will be notified of the total amount owed and when it will be taken from your account - this will be 21 days after the end of the charging period.

The charging period start date is always the day after the account statement is produced, i.e. if statements are set to be produced on the 1st of the month, the charging period will start on the 2nd and finish on the 1st of the next month.

An arranged overdraft is when we agree to a limit that lets you spend a bit more money than you have in your current account. This could help you manage your money if you have to cover short-term expenses such as an unexpected bill.

For more support on the basics – from overdraft definitions to understanding overdraft costs – why not try our handy guide? We’ll also run you through the difference between arranged and unarranged overdrafts.

Find out how overdrafts work

An unarranged overdraft is when you spend more money than you have and you haven’t previously arranged an overdraft limit with us, or you have exceeded your existing overdraft limit.

You can pay off an overdraft at any time, simply by ensuring you have a positive balance in your account.

Unlike loans and credit cards, overdrafts have no scheduled repayment dates. This can make paying off your overdraft a little trickier to manage.

We recommend setting targets of how much you want to pay off each month and factoring these targets into your budget.

Need help with budgeting? Have a read of our budgeting guide.

If you’re worried about your credit score, or your finances in general, you can schedule a financial health check with us.

Using an overdraft could affect your credit score if your account remains inside the overdraft limit for long periods and you don’t pay it back. However, if you pay off your overdraft regularly, this could actually help to improve your credit rating

When you apply for an overdraft, or an increase to your existing overdraft, we do carry out a credit check which will be recorded on your credit file and could have an impact. Before applying, we recommend you use our eligibility checker to find out if you’re likely to be offered an overdraft. This check will be recorded on your credit file but will not have any impact.

To find out more about credit scoring, read our credit scoring guide.

If you’re worried about your credit score, or your finances in general, you can schedule a financial health check with us.