Overdrafts


Understanding your overdraft

An overdraft is borrowing through your current account. This is a short-term borrowing method, and you are charged when you use it. It can give you a bit of extra money for urgent, unexpected costs that might come up. But remember, it can be expensive compared to other ways to borrow.

Designed for short term borrowing

If you need to borrow a small amount of money for a short period of time.

Simple interest rate

Each current account has its own set interest rate for an arranged overdraft. So you’ll always know what you’re being charged.

It’s flexible

An overdraft is flexible - you only borrow what you need at the time.

  • When you apply for an arranged overdraft with us, we look at your circumstances and let you know if you can have one, and how much you can borrow. You must repay any overdraft when we ask you to in line with our General Terms and Conditions.
  • It's important to remember that different current accounts have different overdraft interest and charges.

There are other ways to borrow, such as loans and credit cards, which could provide cheaper alternatives depending on your personal circumstances. A full list of borrowing options can be found here

Arranged and unarranged overdrafts – how they work

An arranged overdraft is when your balance is below zero but within an arranged limit. That means you're borrowing money from us. You must agree the limit with us before it's available to use.

An unarranged overdraft is when your account:

  • goes over your arranged overdraft limit, or
  • has a balance below zero without an arranged overdraft in place.

When you try to make a payment that would take you into an unarranged overdraft, we decide whether to allow or stop the payment based on your personal circumstances. If we let the payment go through, it will take you into an unarranged overdraft. We don’t charge fees for allowing or refusing a payment due to lack of funds.

Here’s an example of how it works for a customer with a £500 arranged overdraft (your specific fees may vary)

Overdraft usage fees

Below you will find some advantages and disadvantages of using an overdraft:

Advantages

Disadvantages

  • An overdraft is flexible — you only borrow what you need at the time
  • It's quick to arrange
  • No early repayment charge. Normally, there isn't a charge for paying off an overdraft earlier than expected 
     
  • Interest charges: The interest charged on overdrafts can be high, which can make it an expensive way to borrow long term.
  • Less money to borrow — The amount of money you can access through your overdraft tends to be lower than with a personal loan.
  • Overspending: Spending is coming out of your current account, so keep an eye on your debit card to avoid a large overdraft. The overdraft could be hard to pay off. We'll send text alerts if you're close to your overdraft limit unless you have opted out.
  • The bank has the right to ask for repayment of your overdraft at any time.
     

Not sure what you’ll pay to use an overdraft?

If you're unsure whether you're eligible for an overdraft, you can use our Eligibility Checker to see whether you're likely to be accepted for one.

Is the eligibility checker right for me

See your results if you’ve already used the overdraft eligibility checker.

If you're unsure whether you're eligible for an overdraft, you can use our Eligibility Checker to see whether you're likely to be accepted for one. Is the eligibility checker right for me?

Existing customers

If you have a current account with us and would like to apply for an overdraft, you can apply by:

  1. logging on to Online Banking
  2. clicking ‘My accounts and transactions’
  3. choosing ‘Manage overdraft’ on the left-hand side of the page.

If approved, you’ll be sent a One Time Passcode (OTP) to authorise this change and your overdraft will be available to use right away.

Alternatively you can visit your local branch with 2 forms of identification or contact us

New customers

If you haven't got a Santander current account and would like to open one, you can apply for an overdraft at the same time. Take a look at our full range of current accounts for more information.

Credit checks

Using an overdraft is borrowing, or getting into debt. Because you're asking to borrow from us, if you ask for a new overdraft or overdraft extension we'll check your financial history with the three main credit agencies. This is called a credit check. If we ask for a credit check on you but don't give you an overdraft or overdraft extension, our request will stay on the files that the credit agencies keep on you.

Online and Mobile Banking

One of the best ways to stay on top of your accounts is to check your balance regularly. Online and Mobile Banking helps by letting you access your banking wherever you are. As long as you have internet access, you can log on to see your balance and what payments have gone in and out of your account.

If you'd like more information about understanding overdrafts, statements, how to manage your money, setting up account alerts and more, please read our Managing your money leaflet (pdf) (1.39 MB)

Free text account alerts

Account alerts can help you avoid overdraft charges, or keep them to minimum, to help you with this, we automatically register you for free alerts about your overdraft usage. 

The alerts are free and let you know when you’ve entered your arranged overdraft, for example due to a regular payment. We’ll send your alerts as texts to the mobile number you’ve registered with us, so please make sure it’s up-to-date. If you have Mobile Banking we may also choose to send you alerts as notifications there.

We no longer automatically register you to receive unarranged overdraft alerts by email, but if you already do, this will continue.

Once your account has been set up, these alerts can be easily customised or turned off, by logging onto Online Banking.

Time to manage your account

If you use an arranged or unarranged overdraft, you'll have until 8pm that day to credit your account with cleared funds and move your balance back into your Arranged Overdraft or into credit and avoid interest.

If you’d like to increase or decrease your overdraft limit, you can do this by:

  1. logging on to Online Banking
  2. click on ‘My accounts & transactions’
  3. click ‘Manage overdraft’ on the left-hand side
  4. choose the relevant account

You can increase or decrease your overdraft in multiples of £50.

Reducing or cancelling your overdraft facility

An overdraft has no specific end date, which means it will continue until either you tell us you no longer want it, or we give you notice that we're reducing it or removing it in full.

If you’d like to cancel your overdraft facility, you can do this by:

  1. logging on to Online Banking
  2. click on ‘My accounts & transactions’
  3. click ‘Manage overdraft’ on the left-hand side
  4. choose the relevant account and enter new limit as 0 and click ‘Continue’

Alternatively, you can contact us

If you have an arranged overdraft with us, we’ll normally charge you an arranged overdraft interest rate for each day you use it.

If you incur charges, we'll let you know on your monthly statement or by letter if you're registered for quarterly statements. These will include details of the transactions that caused the fees and the date they'll be taken from your account.

You’ll be charged interest if you use your arranged overdraft within your agreed limit. If you go beyond your limit, you won’t be charged any interest on the portion of the balance that's above your limit. However, arranged interest will still apply to the portion of your balance within your limit.

Use our Cost Calculator to see how much it may cost you to use your overdraft.

How much does my overdraft cost in pounds and pence?

To help you understand the cost of an overdraft, the table below shows how much £500 through an arranged overdraft costs for each of our products. If you borrow more than this or for a longer period, the cost will be proportionate and may be higher.

Cost of borrowing £500 through an overdraft
 
For 7 days
 
For 30 days
 
For 60 days
 
Santander Edge, Santander Edge Up, Everyday, 1|2|3, 1|2|3 Lite and Over 18s Cash Card Accounts£3.27 
 
£14.01
 
£28.12
 
Choice Current Account£2.54
 
£10.88
 
£21.83
 
Further Education Account£0.91 
 
£3.90
 
£7.80
 
Zero Current Account£1.67
 
£7.17
 
£14.36
 

These illustrations assume you’re £500 into an arranged overdraft from the first day of the period of illustration, you don’t make any withdrawals or deposits, your statement period starts on the first day of the period of illustration and the period of illustration starts in a 30 day month.

We offer current accounts with different overdraft interest rates or without the option for an overdraft facility. We also have different borrowing options such as credit cards, personal loans and additional loans for our existing mortgage customers. You can learn more by visiting our borrowing options page.

Whether or not we agree to give you an overdraft will depend on your circumstances and you must repay any overdraft when we ask you to in line with our General Terms and Conditions. There are no overdraft or Transaction Fees on the Basic Current Account because you are not allowed to go overdrawn on this account.

If you're unsure whether you're eligible for an overdraft you can use our eligibility checker to see whether you're likely to be accepted for one. Is the eligibility checker right for me?

More details on our interest can be found on the web pages for each current account

If you have an account which is no longer available to new customers, please visit our Important information for accounts no longer available to open page for further details.

  • Sign up for free text messages to stay up-to-date on your account.
  • Make use of budget planners, which compares how much you earn with how much you spend. And help you see where you could save money. They can be found by searching for ‘budget planner’ on santander.co.uk.
  • Use Online and Mobile Banking to quickly check your account balances on the move.
  • View our range of current accounts, some of which may charge less for using an overdraft than you’re currently paying. It’s quick and easy to transfer to a different account in our range.
  • Borrowing money in different ways, which could be by using a credit card or taking out a loan. Make sure that any borrowing method you use is both affordable and suitable for your needs.
  • Don’t go over your arranged overdraft limit.
  • Stay up-to-date with any changes to your current account or overdraft, including fees. 
  • Remember that anything you spend from your overdraft will need to be paid back.

Having trouble paying your overdraft or other debts?

It's easy to feel overwhelmed by finances, especially if times are tight. Writing down exactly what you have coming in and out of your account could help you to figure out where your money is going.

Try filling in a budget planner to see what your spending looks like then come and talk to us in your local Santander branch if you'd like help with any of your accounts, overdrafts, loans or credit cards.

If your account is mostly or always overdrawn, we class this as repeat overdraft use. This could indicate that you’re experiencing financial difficulties. We’re here to support you through these difficult times.

There are other ways we can support you managing or reducing your overdraft, here are a few examples of how we can help:

  • Repayment plan – This is an agreement to make regular payments in order to repay your unarranged overdraft balance. We’ll suspend your interest and fees during the time of the agreement.
  • Monthly reducing overdrafts -  We’ll offer a temporary limit to cover your unarranged overdraft balance. It’ll reduce over a period of time to get you back into your arranged overdraft limit. This allows you to clear the arrears while still using your account.
  • Breathing space – This gives you time to contact a third party to develop a repayment plan. We’ll suspend any interest and fees during this time. 
  • Paydown – This is a monthly repayment amount which clears the overdraft. We’ll block the account so you won’t be able to use it.

We tailor these support options to your individual circumstances once we’ve done an affordability assessment with you. Any agreements in place will impact your credit file.

We also have some helpful information on managing your finances on our help with managing my money page.

Below are some examples of overdraft usage and how transactions and interest may be processed.

Example

Balance

Overdraft 

Customer activity

What happens?

1

£200
 

Arranged overdraft of £100

 Card payment of £250

Customer goes £50 arranged overdrawn (stays within arranged overdraft limit). 

2

-£450

Arranged overdraft of £500

Card payment of £200

Depending on the customer's circumstances we'll decide whether or not to allow the payment. If it's allowed, the customer goes £150 unarranged overdrawn (exceeds arranged overdraft limit). If not, the payment will be declined. 

3

£100

No arranged overdraft

Card payment of £200

Depending on the customer's circumstances we'll decide whether or not to allow the payment. If it's allowed, the customer goes £100 unarranged overdrawn (goes overdrawn without an arranged overdraft). If not, the payment will be declined. 

If you'd like some more information about understanding overdrafts, statements, how to manage your money, setting up account alerts and more, please read our 'Managing your money' leaflet (pdf) (1.39 MB)

Was this helpful?

Ask us a question

We'll help you get the
answers you need

Do your banking online

Ways for you to manage your
money without leaving home