Struggling to repay your overdraft?
If you’re struggling to repay your overdraft, or you’re always using your full limit, we’re here to help.
Talking to us won’t impact your credit score.
The cost of your overdraft
Overdrafts can be helpful when unexpected expenses pop up. But they're designed for short-term borrowing and using an overdraft regularly or for long periods can become expensive. Here's what you could be paying each month with overdraft interest charged at 39.90% EAR*.
| Overdraft Amount | £100 | £500 | £1000 | £1500 |
| Monthly interest charge | £2.89 | £14.46 | £28.92 | £43.38 |
*EAR is the Equivalent Annual Rate. This is the actual interest rate of an overdraft, excluding any account fees and charges.
See what your overdraft costs
Use our overdraft calculator as a guide. It's based on assumptions to show the rough cost of borrowing.
See what your overdraft costs
Use our overdraft calculator as a guide. It's based on assumptions to show the rough cost of borrowing.
Get personalised advice
These independent organisations offer free, impartial advice to help you manage your debts:
Get debt advice from StepChange
StepChange offers free, confidential, and unbiased financial advice to get you out of debt.
Citizens Advice
Citizen's Advice is a tusted independent service that can help understand what support is available to you.
National Debtline
National Debtline is an independent debt advice charity. If you're struggling or worried about debt, they can help.
Tips on managing your overdraft
Adjusting the timing of your standing orders and Direct Debits can give you a clearer view of your finances and help reduce unnecessary costs.
Standing orders
Moving the date of standing orders to after your monthly income is paid could make it easier to see how much money you have available until your next payday. This can:
- Help avoid relying on an arranged overdraft to cover bills
- Help reduce the time your overdraft is in use, lowering the interest you pay
You can manage your standing order dates in our app, Internet Banking, by calling 03459 758 758, or by visiting us in branch.
Direct Debits
Shifting the date of your Direct Debits can offer similar benefits. Contact the company you're paying to make this change.
While reviewing your Direct Debits, check if you're paying for services you no longer use. Canceling unused services can save you money.
Unlike a credit card or personal loan, overdrafts don't have a set repayment schedule, so it's important that you have a plan to repay your overdraft.
Reduce your overdraft use
Unless you need an overdraft for essential spending, trying to reduce how often you borrow could reduce your overdraft balance over time.
Create a repayment schedule
Choose a set day to pay a fixed amount towards your overdraft. Doing this regularly will help to consistently reduce your debt over time and may even help you return to credit.
Borrow at a lower interest rate
You could take out a credit card or loan with a lower interest rate to repay your overdraft balance. This can help to reduce your monthly interest payments, allowing you to clear the debt quicker.
Manage your overdraft limit
You can manage your overdraft limit via Internet Banking or our app.
Overdraft step-down plan
Talk to us about setting up a step down plan to reduces your overdraft limit in a controlled way.
If there isn't enough money in your account to make a payment, and it's refused due to lack of funds, our retry periods can help you make the payment.
For Direct Debits, cheques, standing orders, or future dated payments, we'll give you some time to put money into your account to make these payment later in the day. The money paid in needs to be immediately available to use. If you pay enough money into your account to cover the payment, it'll be made.
The best ways to pay money into your account are:
- Transfer money from another TSB account using the app or Internet or Telephone Banking
- Transfer money from another bank account
- Pay in cash over the counter in branch
Understanding how to handle overdrafts can help minimise costs and put you on a path to better financial health.
Avoiding additional interest
If you use an unarranged overdraft, you have until 10pm the same day to avoid paying additional interest. Similarly, if you dip into your arranged overdraft, repaying by 10pm can prevent extra charges.
Pay off a fixed amount each month
Over time this could reduce any negative balance, and even help you return to credit. You could use savings to do this, where you may be receiving a lower rate of credit interest than you're paying to borrow on your overdraft.
Knowing what's going in or out of your account can help you stay in control and reduce reliance on an overdraft.
Ways to stay on top of your finances:
Check your statements - to help track your spending, manage your budget, and see how much using your overdraft is costing you.
Review your Statement of Fees - this will tell you how much your overdraft has cost you over a year. We’ll send this to you annually, near the anniversary of your account opening.
Identify spending habits - understanding what you spend money on and where you could save can help you stay in control of your account.
Create a budget - knowing your regular payments and creating a budget may help you reduce your overdraft use and avoid overspending.
Check your balance regularly
Via our app, Internet Banking, ATMs or pop into your branch. By doing this you can see how much money is in the account and how much arranged overdraft limit you still have available.
Set up text alerts
If you sign up for alerts, we'll let you know when:
- You go into an arranged overdraft
- Your balance drops to £50 or less
- You're over your account limit or when you don't have enough money to make a payment
You can also set custom alerts for low or high balances to help track your finances.
Know your borrowing options
Short-term borrowing
Overdrafts can be useful for short term borrowing, such as covering an unexpected cost or bill. If you're using it frequently for other costs, there may be a different solution for you.
Long-term borrowing
If you need to borrow for longer, there are other ways to borrow that could give you a better interest rate. To talk through your options, book an appointment or visit a branch.
