Understanding your overdraft

An overdraft is essentially borrowing through your current account. 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.

Having an overdraft can be useful as a back-up to help you deal with short term, unexpected costs. However, it can be expensive to use an overdraft regularly as the fees can mount up, especially if you go into your Unarranged Overdraft.

It's important to remember that different current accounts have different overdraft fees and charges. There are also alternative forms of borrowing, such as loans and credit cards, which could provide cheaper alternatives depending on your personal circumstances.

Arranged and Unarranged Overdrafts

An Arranged Overdraft is when your balance is below zero (you're borrowing from the bank) but within an arranged limit. 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
  • overdrawn without an Arranged Overdraft in place.

When you try to make a payment that would take you into an Unarranged Overdraft, we make the decision whether to allow the payment to go through based on your individual circumstances.

Charges and fees for using an Arranged or Unarranged Overdraft depend on which account you have with us. For more details on these charges take a look at the web page for your particular account.

If you have an Arranged Overdraft with us, we’ll normally charge you an Arranged Overdraft Usage Fee for each day you use it. An Unarranged Overdraft Usage Fee will be charged for each day you go over your arranged limit.

Depending on your account, there are also situations when you might be charged a fee for allowing or refusing a payment despite lack of funds.

Here's how these work:

  • A fee for allowing a payment despite lack of funds may be charged if we decide to let the payment go through that will cause you to go into or further into an Unarranged Overdraft.
  • If we decline or decide not to make the payment, it’s called refusing a payment due to lack of funds. Where we do this, your account will stay in credit or in your Arranged Overdraft but you might have to pay a fee for refusing a payment due to lack of funds. This fee could cause your account to go overdrawn.

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. If you have an Arranged Overdraft on your Choice Current Account and you go beyond your limit we will continue to charge you the Arranged Overdraft Usage Fee. There are no overdraft or Transaction Fees on the Basic Current Account because you are not allowed to go overdrawn on this account.

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

If you have an account which is no longer available to new customers, including the Zero Current Account, please visit our Important information for accounts no longer available to open page for details on fees.

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)

Free text and email account alerts

Account alerts can help you avoid overdraft charges, or keep them to a minimum. To help you with this, and as a response to regulation, by 18 December 2019 we’ll start to automatically register you for free alerts about your arranged overdraft usage. 

The alerts are free and could be to let you know that you’ve entered your arranged overdraft, or are about to, due to a regular payment set up on your account for example. 

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’re also changing how we communicate about using an unarranged overdraft. By 18 December 2019, we'll no longer automatically register accounts to receive there 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, if you prefer, turned off, by logging onto Online Banking.

Time to manage your account

If you use an Arranged or Unarranged Overdraft, you'll have until 4pm that day to credit your account with cleared funds and move your balance back into your Arranged Overdraft or into credit and avoid fees.

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 reduce or cancel your overdraft facility, you can do this through your online banking or please call 0800 9 123 123. Alternatively, visit your local branch

Existing customers

If you have a current account with us and would like to apply for an overdraft or an increase to your existing overdraft (depending on your circumstances), you can apply by:

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.

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.

We also have some helpful information on managing your finances on our Money worries pages.

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

Example

Balance

Overdraft 

Total funds available

Customer activity

What happens?

1

£200
 

Arranged overdraft of £100

 £300

 Card payment of £250

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

2

-£450

Arranged overdraft of £500

£50

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 £50 unarranged overdrawn (exceeds arranged overdraft limit). If not, the payment will be declined. 

3

£100

No arranged overdraft

£100

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)'

To speak to someone at Santander for help and support, call 0800 9 123 123. Alternatively, visit your local branch

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