Confused with Overdraft repayments - HELP

paulknig

I am currently overdrawn in my Lloyds TSB bank account (over the planned overdraft). They have offered to increase my planned overdraft to reduce the bank charges that are incurred. I have agreed to pay back £100 per month to reduce the overdraft - i think about £70 is to pay it off and £30 is interest.

The problem i'm having is how would this appear on my statement? If I pay back £100p/m, where is the money going? Surely I would be paying back my overdraft if I just kept more money in my account?

Sorry for being thick.

stephane_2

Well if let say your agreed overdraft is £500 then if you pay in £100 it will show that your overdrawn by £400 & assuming you have a salary transferred to that account of let say £1500 then you're in credit of £1100. How much you go overdrawn the month after that will depends if you can manage to stay within your £1100 available, but if not and you go overdrawn again by £100 so that would mean that you've spent £1200 that months, which £100 is the bank money....hope it has become clearer