Authorised Overdraft

kezzae

Hi

This may seem like a really stupid question but Ive been reading the boards alot and cant find the answer Im looking for.....

Ok, We have an authorised overdraft of £400, say for example we go £250 overdrawn, when my hubby's wages go in, the bank takes all the £250, as it should because we've borrowed it..... but from reading the boards some people talk about paying off the overdraft, in fixed payments, we presume, how can this be? Our bank takes whatever we are OD in one lump! We are a little confused..... if somebody can explain..... how can it be paid off in re payments?

YorkshireBoy

If the overdraft is 'agreed' then you're free to dip in and out again as you please, and the only cost is a small amount of debit interest each month.

Where others are talking about repayment plans it's because the bank has called the overdraft in under their 'repayable on demand' condition.

If your account is run well, and adequately/regularly fed, then the bank are unlikely to call in the overdraft.

kezzae

Thankyou for explaining that! We thought we were doing something wrong, with the bank taking whatever we were overdrawn in one lump sum. So its a good thing the way we run our CA then?

daveyjp

You can pay it off slowly by reducing your limit over a few months - say £50 a month. Once a wage goes in call the bank and reduce it to £350 and live within this limit, then the month after do it again. Alternatively save £50 a month for 8 months then pay this into the account and request a reduction of the o/d.