How do you pay off an overdraft?
Consider a money transfer card: Another option you might want to consider – especially if you have a bigger overdraft – is a 0% money transfer card.
With this type of card, you can move funds from your credit card into your current account, and then use the cash to pay off your overdraft interest-free..
What happens if you don’t pay back your overdraft?
If you go over your arranged overdraft limit, your bank will report this to your credit file. A prolonged period of being in an unarranged overdraft could lead to the bank defaulting your account, which will be recorded on your file for six years.
Do I get charged for being in my overdraft?
An overdraft is a form of credit, which means that any money you use from your overdraft is money you owe to the bank. When you use an overdraft, this can incur an interest charge or fee from your bank.
How long do you have to pay an overdraft?
You’ll have to pay off the overdraft eventually, usually after two or three years. The way banks try to encourage this is to reduce the maximum 0% overdraft each year – the idea being that by the time the 0% ends, you’ll have paid it off. Fail to do so, and you’ll be subject to astronomical charges and fees.