Overdraft Renewal

kittykat8

Hi All

This is not a post about weather one should have an overdraft or not but I am curious about Overdraft renewals.

I have overdraft renewal date 1st october using some of it, are banks giving 30 days notice if they are changing it. Just interested to see if they are.

I went in to mine and they said i should have a letter but the sysyem won't say until the 1st October, this is santander.

Thanks


marion

smartiedriver_2

Hi Marion,

In theory, overdrafts are an on-demand form of borrowing, and as such the bank can cancel it with no notice if they so wish.

In practice, they tend to give 30 days' notice if they are making any changes.

I would add, however, that if your account is relationship managed, that is, you have a named manager and are therefore most likely either a high net worth customer or a relatively large business customer, then the renewal may be actioned earlier or later than you expect. This could be because the manager has a high volume of renewals in one month and is spreading them out, or is getting ahead to prepare for annual leave, or it could be done after the actual date because for whatever reason they were behind or perhaps covering for a colleague who was off sick etc.

If you are not RM'd then it will come out automatically.

jambosans

smartiedriver wrote: »

In theory, overdrafts are an on-demand form of borrowing, and as such the bank can cancel it with no notice if they so wish.

I don't mean to sound pedantic, but that's not entirely correct, although overdrafts are repayable on demand, removal without notice would require a level of justification:-

Santander_Current_Account_T&C's wrote:

7.4 b) We have the right to change your Arranged Overdraft limit at any time. We can also require you to repay the whole or any part of your Arranged and/or Unarranged Overdraft at any time.

We will usually give you 30 days’ notice of our intention to change your Arranged Overdraft limit or repay the whole or any part of any overdraft, however we may do either of these things without advance notice to you where it would be reasonable for us to do so.

Terms such as "reasonable" are arguably vague, but I'd still expect a pretty good reason for cancellation without notice.