Requesting a current account overdraft

Even if you regularly check your bank balance online, it's still possible to go overdrawn (into a negative balance) by accident. This might happen when a cheque deposit is delayed, a debit card transaction doesn't clear immediately, or payments are processed at unexpected times.

Understanding overdraft

If you have an agreed overdraft facility, your account can go negative up to the approved limit. However, we will charge fees for each transaction that takes you beyond that limit.

Members with a credit union current account (CUCA) can request an overdraft facility. An arranged overdraft is a flexible loan that allows you to spend more money than you have available in your account (up to an agreed limit) and to pay it back later with interest added.

This guide has everything you need to know about eligibility criteria, overdraft limits, interest rates, application procedures, and terms.

Eligibility criteria

To be able to apply for an overdraft with us, you must:

• Be between 18 and 74 years old
• Have held a credit union current account with us for at least six months
• Have a regular income (such as salary or benefits) paid into your account, with a minimum of £250 per calendar month for the last three months

Interest rates and charges

It is important to remember that using your overdraft costs money. For each day you are in your overdraft, interest will be added to the amount you owe. This can be relatively inexpensive for short periods, but a loan may be more affordable if you need to borrow for longer than a few weeks.

• Interest rate - 42.6% APR (3% per month) Example: £300 overdraft for 14 days, Interest cost: £4.11.
• Fees - There are no additional fees or charges for overdrafts

How to apply for an overdraft on a current account

To apply for an overdraft facility on your current account, please visit your local branch or email help@creditunion.co.uk. You must be receiving a regular salary or benefit into your credit union account to be eligible.

Remember, overdrawing too often or leaving your account negative for too long can lead to serious consequences, including account closure and being reported to a debit bureau.

Overdrafts need to be arranged and agreed upon with us in advance. To ask for an overdraft on your account, please send us a support request, visit a branch, or send us a secure message via your mobile app.

• In your message, please let us know the overdraft limit (up to £600) you would like to ask for
• We can't set up overdrafts over the phone

Application review

We will consider overdraft requests in the same way as any other loan application, considering affordability, your past repayment history, and your ability to repay.

• A member of our loan team will review your eligibility and let you know our decision by the end of the next working day.
• If your request for an overdraft is approved, you will be sent a copy of our Overdraft Terms & Conditions. This will also include information confirming the date your overdraft will be available, the agreed overdraft limit, interest rates, and how to cancel it if you no longer need it

Informal overdrafts

All overdrafts need to be approved in advance, and usually, payments from your account will be declined unless there is more money in your account to cover them.

In a small number of situations, your account may still occasionally go overdrawn for technical reasons. This includes 'offline' payments, such as those made on a plane or train journey where the card reader is not connected to the internet.

If your account goes overdrawn for these reasons, this will be treated as an 'unarranged' overdraft. You must pay the money back as soon as possible, and interest will be charged at 42.6% APR, the same rate as an arranged overdraft.

Other things to bear in mind

• We can ask you to repay your overdraft balance (arranged or unarranged) in full at any time. But if doing so would put you in financial difficulty, you should contact our Credit Control Team, who will work with you to agree on a payment plan you can afford
• We will review your overdraft (including the agreed limit) every year to make sure it is affordable for you and that you still meet the eligibility criteria.
• We have the right to adjust your overdraft limit or cancel it altogether if your circumstances change or we feel the facility is being misused. We will give you 30 days' notice before doing this.