Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Gerrymouse
    • By Gerrymouse 12th Mar 17, 10:22 AM
    • 18Posts
    • 5Thanks
    Gerrymouse
    How do I work out APR of a daily fee Halifax overdraft?
    • #1
    • 12th Mar 17, 10:22 AM
    How do I work out APR of a daily fee Halifax overdraft? 12th Mar 17 at 10:22 AM
    I am with Halifax and they charge daily fees for going overdrawn, so £1 per day for up to £1000 overdraft, £2.00 per day up to the next tier and then £3 for anything over £3000 or something.

    I typically pay around £78 per month for my overdraft of £4,500.

    I called Halifax and asked them for the APR and they couldn't tell me, I want to sort my debt into APR order so I can figure which to pay off first.

    I appreciate I might not get exact figure but would I just assume 21% given £4500 x 21% is £78 monthly

    I appreciate there is the issue of compound interest ?

    Any help much appreciated
Page 1
    • masonic
    • By masonic 12th Mar 17, 10:34 AM
    • 8,770 Posts
    • 5,897 Thanks
    masonic
    • #2
    • 12th Mar 17, 10:34 AM
    • #2
    • 12th Mar 17, 10:34 AM
    So your account is permanently £4,500 overdrawn? If so, then your figures are roughly correct. Compound interest would not apply if you are paying off the overdraft fees rather than letting them increase your debt. Are you in financial difficulties?

    Overdrafts are designed to bridge the gap between paying bills and getting paid, so you'd normally only be in overdraft for part of each month.
    • YorkshireBoy
    • By YorkshireBoy 12th Mar 17, 11:29 AM
    • 28,854 Posts
    • 16,624 Thanks
    YorkshireBoy
    • #3
    • 12th Mar 17, 11:29 AM
    • #3
    • 12th Mar 17, 11:29 AM
    Best summed up in one word...massive (if it could be calculated)!

    They can't quote an EAR (not APR) because it's not based on exact balance, but balance tiers.

    In your situation there's no point in paying off the overdraft unless you can drop a tier by doing so. So concentrate on other debts (incurring true APR interest) such as credit and store cards.

    There may be other options available to you to reduce this burden, depending on your financial circumstances. If you state exactly what they are (total debt, where it is, income, credit history, etc) then I'm sure suggestions will follow.
    • Gerrymouse
    • By Gerrymouse 12th Mar 17, 12:43 PM
    • 18 Posts
    • 5 Thanks
    Gerrymouse
    • #4
    • 12th Mar 17, 12:43 PM
    • #4
    • 12th Mar 17, 12:43 PM
    Best summed up in one word...massive (if it could be calculated)!

    They can't quote an EAR (not APR) because it's not based on exact balance, but balance tiers.

    In your situation there's no point in paying off the overdraft unless you can drop a tier by doing so. So concentrate on other debts (incurring true APR interest) such as credit and store cards.

    There may be other options available to you to reduce this burden, depending on your financial circumstances. If you state exactly what they are (total debt, where it is, income, credit history, etc) then I'm sure suggestions will follow.
    Originally posted by YorkshireBoy
    Yes makes sense and my plan was clear an entire tier at a time , thanks
    • LabRatty
    • By LabRatty 12th Mar 17, 2:01 PM
    • 47 Posts
    • 61 Thanks
    LabRatty
    • #5
    • 12th Mar 17, 2:01 PM
    • #5
    • 12th Mar 17, 2:01 PM
    Hi,
    Could you get a money transfer card and shift the debt onto a 0% card? Obviously depends on the state of the rest of your finances, but would mean you were repaying the debt without interest continually being added.

    Also, ODs are repayable on demand, which means this bit of your debt is more precarious than it might be if reorganised.

    All the best,
    LR
    Save In 2017 #109
    • pinkdalek
    • By pinkdalek 12th Mar 17, 8:28 PM
    • 1,205 Posts
    • 696 Thanks
    pinkdalek
    • #6
    • 12th Mar 17, 8:28 PM
    • #6
    • 12th Mar 17, 8:28 PM
    Just one question.......Why?
    • PeacefulWaters
    • By PeacefulWaters 13th Mar 17, 3:18 AM
    • 5,835 Posts
    • 7,034 Thanks
    PeacefulWaters
    • #7
    • 13th Mar 17, 3:18 AM
    • #7
    • 13th Mar 17, 3:18 AM
    Just one question.......Why?
    Originally posted by pinkdalek
    Answered in the original post, and makes sense.

    I want to sort my debt into APR order so I can figure which to pay off first.
    • mt99
    • By mt99 13th Mar 17, 10:38 AM
    • 233 Posts
    • 111 Thanks
    mt99
    • #8
    • 13th Mar 17, 10:38 AM
    • #8
    • 13th Mar 17, 10:38 AM
    One way to work out the effective interest rate of a series of regular payments (for example monthly) is to use the Excel @IRR function - which you can Google - that will give the rate of return Halifax is getting from your stream of (varying) payments
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,164Posts Today

7,497Users online

Martin's Twitter
  • Young journalist/broadcaster looking for a mentor? Great opportunity here... https://t.co/aojKD6t5Ti (pls share with anyone suitable)

  • Today's twitter poll: For those who are working, if you lost your job today, how long would you be able to still pay all the bills for?

  • RT @itvMLshow: Want to be a part of our audience and get the chance to ask Martin a question, LIVE? Here's where you can apply: https://t.c?

  • Follow Martin