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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.

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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.


Total amount of credit


Representative APR



A representative APR (Annual Percentage Rate) 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 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. 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

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

Overdraft fees

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.
£20.00 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.

Next steps

Check if you're eligible

Using the eligibility checker will not affect your credit score in any way.

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Apply for an arranged overdraft

Already have an M Plus or Club M Account? You can use our online form to request or amend an arranged overdraft.

Apply now

Want an account with an overdraft?

If you need one, our range of current accounts comes with overdraft options. Subject to status.

View our current accounts

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Our online budget planner will guide you through this process and it should only take around 15 minutes to complete. Once you've completed this, one of our team will contact you directly to discuss your options.

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[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.