Graduate overdraft

hello2007

My graduate overdraft is going into it last year and I will soon have my interest free reduced to 1000 pounds. My overdraft limit is currently 1,500 pounds and I will have pay 19.9% interest on anything over the 1000 pounds. ( pound sign not working)

How much interest will I be charged on the 500 pounds ?

casper_g

If you left the balance at £1,500 overdrawn exactly, the interest each month would be something around £7.50 to £7.80.

You won't be able to do this though. Assuming your account has money going in and out each month your balance will vary. As long as it's under £1,500 overdrawn you'll pay no more than the amount above. If you only use the last £500 for a few days, the interest will be a lot less than this. I tend to end the month a couple of hundred quid into my overdraft but as I'm only in it for a day or two I only pay pennies in interest.

Of course, if you stray over the £1,500 they'll hit you with all kinds of fees, but presumably that's no different from the situation you're in now.

hello2007

casper_g wrote: »

If you left the balance at £1,500 overdrawn exactly, the interest each month would be something around £7.50 to £7.80.

You won't be able to do this though. Assuming your account has money going in and out each month your balance will vary. As long as it's under £1,500 overdrawn you'll pay no more than the amount above. If you only use the last £500 for a few days, the interest will be a lot less than this. I tend to end the month a couple of hundred quid into my overdraft but as I'm only in it for a day or two I only pay pennies in interest.

Of course, if you stray over the £1,500 they'll hit you with all kinds of fees, but presumably that's no different from the situation you're in now.

My whole overdraft is interest free now until the end of July and I have never paid any fees or interest. I always make sure that I stay under the £1,500 but want to try and pay off the £500 by July so that I do not have to pay any interest. I will then pay off the overdraft over the next year before the interest free expires on the remaining £1000.