{"id":2221,"date":"2017-04-26T11:49:24","date_gmt":"2017-04-26T11:49:24","guid":{"rendered":"https:\/\/www.ccpc.ie\/consumers\/?page_id=2221"},"modified":"2024-08-26T12:40:27","modified_gmt":"2024-08-26T11:40:27","slug":"overdrafts","status":"publish","type":"page","link":"https:\/\/ccpc.inventise.ie\/consumers\/money\/loans\/overdrafts\/","title":{"rendered":"Overdrafts"},"content":{"rendered":"

100An overdraft is a loan you arrange through your current account. It allows you to spend more money than you have in your current account up to an agreed limit, known as the \u2018overdraft limit’.<\/p>\n

Why use an overdraft?<\/h3>\n

Overdrafts may not be the cheapest way to borrow money, but they are flexible and useful for short-term credit and for relatively small amounts. For example, a short-term overdraft can help you meet extra expenses such as back-to-school costs, Christmas or holiday expenses. Or if your income is not regular, an overdraft can help you manage your money.<\/p>\n

How overdrafts work<\/h3>\n

The amount you owe on your overdraft goes up\u00a0and down depending on how much you spend and put into your current account. You repay your overdraft over short terms of between\u00a0six and 18 months and your bank sets the\u00a0date for full\u00a0repayment. You can clear your overdraft before the expiry date if you want to, and that will save you paying more\u00a0interest.<\/p>\n

If you don’t clear your overdraft within the agreed time limit, you can damage your credit rating<\/a> and make it difficult to get another loan or overdraft later on. Try not to use an overdraft too often as the more often you use it, the more interest you will pay. Some overdrafts also have a condition that your account must be in credit for a certain number of days in a year, for example, 30 days.<\/p>\n

Don’t go over your overdraft limit – as this will be recorded on your credit history\u00a0and you will be charged additional interest and fees.<\/p>\n

Interest on overdrafts<\/h3>\n

You pay interest on the amount you owe at any one time. The interest rate on overdrafts is usually a little higher than the rate charged on personal loans and can range from about 11% to about 15% depending on your bank.<\/p>\n

Overdraft interest rates are variable, meaning they can go up or down. If your bank decides to change the overdraft interest rate they must tell you in writing or publish a notice in a national newspaper. You will see any change on your bank statement too.<\/p>\n

Other fees and charges<\/h3>\n\n\n\n\n\n\n\n
Fee<\/td>\nReason<\/td>\n<\/tr>\n
Facility fee<\/td>\nThis is a one-off fee for setting up your overdraft.<\/td>\n<\/tr>\n
Renewal fee<\/td>\nThis is only charged if you renew your overdraft at the end of the agreed term.<\/td>\n<\/tr>\n
Surcharge interest<\/td>\nThis is extra interest that your bank charges if you spend more than your agreed limit. It is charged on top of your standard rate of APR for the agreed overdraft limit. Surcharges range from about 6% to about 12%.<\/td>\n<\/tr>\n
Referral fee<\/td>\nThis is a fee your bank charges for each transaction you make over your overdraft limit.\u00a0<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

An overdraft is a loan you arrange through your current account. It allows you to spend more money than you have in your current account up to an agreed limit, known as the \u2018overdraft limit\u2019.<\/p>\n","protected":false},"author":15,"featured_media":0,"parent":836,"menu_order":100,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"tags":[16,9,8],"class_list":["post-2221","page","type-page","status-publish","hentry","tag-banking","tag-loans","tag-money"],"acf":[],"yoast_head":"\nOverdrafts - CCPC<\/title>\n<meta name=\"description\" content=\"Overdrafts allow you to spend more money than you have in your current account up to an agreed limit. 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