Skip to main content

Overdrafts explained

An Arranged or Unarranged Overdraft is a way to borrow money from the bank and is intended for occasional use.

Here’s a quick overview of how they work:

Arranged Overdraft – This is a borrowing limit on your account that we agree with you in advance, so it’s there when you need it. You’ll pay Arranged Overdraft interest on the amount you choose to use.

Unarranged Overdraft – This is where you borrow from us when there is no money left in your account (or when you have gone past your Arranged Overdraft limit) and this has not been agreed with us in advance. You will pay Unarranged Overdraft interest on the amount you use.

If you don’t have enough money in your account to cover a payment, we may charge a Refusing A Payment Due To Lack Of Funds Fee.

You should aim to repay your overdraft borrowing as quickly as possible and use it responsibly as your usage will be reflected in your credit file.

Calculate the cost of an overdraft

Use our simple overdraft calculator to compare the cost of overdrafts and work out how much an overdraft could cost you.

It looks like you're not using JavaScript...

To use our overdraft calculator, you need to have JavaScript enabled in your browser.

An Unarranged Overdraft is when you go over the amount available in your account and you haven't arranged an overdraft with us – or you go over your Arranged Overdraft limit

Cost of overdraft

Calculations are based on the information you provided and are for illustrative purposes only. The costs below are for the month you use your overdraft in this way. Your debit interest rate may differ from the rate below.

Account EAR Arranged Overdraft costs Unarranged Overdraft costs Total cost

How does our Overdraft compare?

Representative example

Rate of interest

18.29% p.a.

Variable

Total amount of credit

£1,200

Representative (variable)

EAR1/APR2

19.90%

Variable

A Representative APR (Annual Percentage Rate) is the rate you may pay and is designed to let you compare costs with other credit products. Your actual rate may differ and will be dependent on your financial circumstances. The maximum rate offered will be 39.90%. Your rate will apply to both Arranged and Unarranged borrowing and will be advised upon successful application.

As an example, if you borrow £500 it will cost you:

7 Days30 Days60 Days
£1.75£7.51£15.13

This is an example based on 19.90% EAR1/APR2 You can use our calculator to work out how much your anticipated overdraft borrowing could cost.

Overdraft fees

DescriptionFeeBuffer
Refusing A Payment Due To Lack Of Funds Fee You'll be charged this fee when we refuse a payment due to lack of funds in your account (or Arranged Overdraft). But you'll not be charged this fee if the value of the refused payment is £4.00 or less. This is the Refusing A Payment Due To Lack Of Funds Fee Buffer Amount.£4.00£4.00
Monthly Maximum Charge The Monthly Maximum Charge (MMC) is a monthly cap on Unarranged Overdraft charges. The MMC is the most you'd pay each month in interest and fees combined.

1. Each current account will set a monthly maximum charge for:
(a) going overdrawn when you do not have an Arranged Overdraft; or
(b) going over your Arranged Overdraft limit (if you have one).

2. This cap covers any:
(a) interest for going over your Arranged Overdraft limit; and
(b) fees for each time we Refuse A Payment Due To Lack Of Funds.
£40.00 per calendar month

The amount of the Refusing A Payment Due To Lack Of Funds Fee and debit interest will be notified to you at the end of each calendar month, giving you at least 14 days notice before it is applied to your account.

Check if you're eligible

Use our overdraft eligibility tool to check if you’re likely to be accepted for an Arranged Overdraft. This won’t leave any visible footprint on your credit history or affect your credit score.

Check eligibility Link opens in a new window

Ready to apply?

New application?

Read a quick recap, then apply.

Apply now

Already started?

Pick up where you left off.

Continue application

Need some help?

Find answers

See the answers to the questions we get asked most.

Read FAQs

Ask questions

0800 678 3654

Or if you're abroad, call us on
+44 141 221 7300

We're here Monday to Friday 8am - 8pm,
Saturday 9am - 5pm, Sunday 10am - 5pm

Calls may be recorded for training and quality purposes.

[1] EAR (Effective Annual Rate) - The Effective Annual Rate is used to express the cost of borrowing on current accounts. The EAR takes account of the rate of interest charged, the frequency it is levied to accounts and compounding of interest. It does not include overdraft fees and is variable.

[2] APR (Annual Percentage Rate) - A representative APR is the rate you may pay and is designed to let you compare costs with other credit products, taking into account that you may pay interest on interest and includes any fees which apply. If no fees apply, the APR will be the same as the EAR. APRs are variable and may change. The maximum rate offered will be 39.90%. Your rate will apply to both Arranged and Unarranged borrowing and will be advised upon successful application.