Help using my overdraft less
It’s best not to use your overdraft regularly. Overdrafts are designed for short-term use and can help cover unexpected costs while you’re waiting for payday. Since they’re designed for short-term use, they’re usually more expensive than other types of borrowing such as personal loans and credit cards. This means you could pay a lot more in interest if you use an overdraft regularly. Some lenders call this ‘repeat use’.
As a responsible lender, we look at how you’re using your overdraft and we’ll send you a message in-app if you’ve used it for 6 months in a row and the interest we’ve charged you is more than 6% of your limit. For example, if you have a limit of £100 we would message you if you have used your overdraft 6 months in a row and have paid more than £6 of interest during this time.
We do this to help you avoid paying more interest than you need to and so you don’t get into a cycle of using your overdraft.
How can you reduce your overdraft use?
Calculate your interest: to see how much an overdraft could cost you over a period of up to 31 days, use our overdraft cost calculator.
Make a budget: creating an accurate picture of your total monthly income and expenses can give you a good idea of where your money goes each month, and where you could potentially cut costs. You could use a free online budget tool such as this Budget Planner by Money Helper.
Chat to us: You can chat with a member of our specialist team who can look at ways to help you manage your overdraft. Rest assured, we’ll never ask you to pay anything you can’t afford.
Get confidential, financial advice: You could also speak to a charity or organisation who can offer free advice, help and support with any money worries. You can find a list of organisations here.
If you’re worried about your overdraft or other finances, there are things we can do to help. We have a specialist team on hand to support you. You can read more about what support we can offer on our Money Worries page.
