overdrawn on First Direct account for 1 month

longwalks1

I have a first direct 1st account along with my offset mortgage with them, and think I have a £500 overdraft with them, i need to use this this month, will there be any charge by them, and if so how much?

Thanks in advance

onlypaddy

usually the first £250 is interest free. not sure on the interest rate over this though

longwalks1

Thanks paddy, its 15.9% apr i think, so if i was to go overdrawn for a month, would it be 15.9% (divided by) 365 days (multiplied by) 30 days?

Thanks again

TheEffect

Or 15.9% divide by 12 for the whole month.

For example, a £1250 overdraft (£250 interest free, so £1000 paying for) would be £159 interest over the year, or £13.25 a month.

YorkshireBoy

britishboy wrote: »

Thanks paddy, its 15.9% apr i think, so if i was to go overdrawn for a month, would it be 15.9% (divided by) 365 days (multiplied by) 30 days?

No. 15.9% is the EAR. You need to use the 'simple rate', ie non-compounded, to calculate the interest to be charged to the account.

15.9% equates to 14.85% p.a. non-compounded, so a static £500 overdraft balance for 31 days would cost you...

£500 x 14.85% / 365 x 31 = £6.31, or 20p per day.


Beats me when authorised borrowing is so (relatively) cheap why so many posters on here say they don't want an overdraft, preferring instead to gamble on not slipping up and incurring unauthorised overdraft charges/interest!

diable

Have you phoned FD for advice?

mrmajika

Because you have an offset mortgage with them, the interest on any used portion of overdraft above £250 (the interest free amount) is your current mortgage rate.