Resolved Question

How do overdrafts work,i am a bit thick when it comes to financial stuff?

i have a £1000 overdraft facility with my building society,i have never had to use it but i may need to soon,so say if i overdrew £500 how would they take it back? can i pay it back weekly/monthly????

Best Answer - Chosen by Voters

If you take the money from your overdraft, the next time any money goes into your account it will pay the overdraft off - example below:

Overdraft = 1000
Withdraw = 500
Overdraft Now = 500

Pay in 300
Overdraft Now = 200

So you will still be in your overdraft facililty. Once your in it, it is very hard to get back out again.

Hope this helps!

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Other Answers (2)

• Basically, an overdraft gives you an extension to your current account and allows you to spend money you don't have. There's no timescale on paying it back but you will be charged interest on it every month it's overdrawn so the bank are quite happy for you to leave it overdrawn as it gives them an income.
  
  If there's anyway you can avoid using it please do so because once you start it's very difficult to stop unless you know there's a lump sum payment coming your way soon which will put the account back in credit.

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• You might want to consider arraigning a loan with them I believe but I am happy to be corrected that the interest rate will be more favourable to you, plus your overdraft facility remains intact for emergency's. Go and talk to them.

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