Santander APR on authorised overdraft of £12.01

smallbiznewbie

Just for the hell of it, can anyone calculate the APR on an agreed O/D of £12.01 that lasts for the full year?

Santander currently charge £1/day, capped for 20/days a month, though we all know that that is never going to go down and it's probably just a matter of time before it's either £1.50/day or uncapped.

They have a £12 buffer, which is good of them (sarcasm).

I've seen some extortionate figures around that I can't believe are true. If they are true, why aren't they subject to limits like PayDay loans companies?

And yes, I've opened an A/C with the coop, which charges something like 12% APR on authorised O/Ds, but I've got several accounts with Santander and I think the coop is probably going to want me to build up a bit of trust before I'm allowed to open several accounts with them.

bengal-stripe

Why do you want to be so stupid and go by one penny overdrawn?

Go thousand quid overdrawn, it costs the same and the APR will be much, much lower!

bigadaj

bengal-stripe wrote: »

Why do you want to be so stupid and go by one penny overdrawn?

Go thousand quid overdrawn, it costs the same and the APR will be much, much lower!

Missing the point maybe.

Top of my head would suggest a simple apr of around three thousand per cent, compounding will raise this significantly, so fair point, they are no better than wonga.

dealer_wins

smallbiznewbie wrote: »

Just for the hell of it, can anyone calculate the APR on an agreed O/D of £12.01 that lasts for the full year?

Santander currently charge £1/day, capped for 20/days a month, though we all know that that is never going to go down and it's probably just a matter of time before it's either £1.50/day or uncapped.

They have a £12 buffer, which is good of them (sarcasm).

I've seen some extortionate figures around that I can't believe are true. If they are true, why aren't they subject to limits like PayDay loans companies?

And yes, I've opened an A/C with the coop, which charges something like 12% APR on authorised O/Ds, but I've got several accounts with Santander and I think the coop is probably going to want me to build up a bit of trust before I'm allowed to open several accounts with them.

Because even the desperate financially !!!!!! wouldnt leave an account £12 overdrawn for a year with those charges.

Strange post BTW, and why do you want to open "several" co-op accounts LOL

smallbiznewbie

I was trying to make a point.

@dealer wins, I have a joint a/c with santander, my own current a/c, one I use for Paypal (they can't be trusted) and one I use for the internet (the previous card was hacked which meant direct debits to Spotify, my web hosting company etc. etc. suddenly ceased.)

Not so strange really..

@bengal-stripe

Why do you want to be so stupid and go by one penny overdrawn?

Because they have a buffer of £12. After £12 you get charged.

Go thousand quid overdrawn, it costs the same and the APR will be much, much lower!

Thanks, I managed to figure that one out for myself. I was trying to make a point.

@bigadaj, you seem to understand what I'm trying to say.

CLAPTON

after a year you would be charged 12 x £20 = £240 in fees on a debt of £12

assuming no other charges then the apr is

240x100/12 = 2000% APR assuming no payments were required each month

however it won't be classified as an interest rate of 2,000 % as you are charged 'fees' and no interest.


is that what you are asking?

smallbiznewbie

@CLAPTON

Yep. Thanks. I knew it was going to be a big number, but the Wikipedia page on APR was beyond me.

I understand the technicality of not being an interest rate, but from my POV it's exactly the same as an APR.

I'm baffled that few seem outraged on the interweb.

Cell

CLAPTON wrote: »

after a year you would be charged 12 x £20 = £240 in fees on a debt of £12

For the purposes of this illustration isn't the interest incurred based on the 1p? By which I mean that if you're £12 O/D there is no charge, but the marginal increase of 1p would lead to £240 being charged.

CLAPTON

Cell wrote: »

For the purposes of this illustration isn't the interest incurred based on the 1p? By which I mean that if you're £12 O/D there is no charge, but the marginal increase of 1p would lead to £240 being charged.

no the debt is 12.01

but as I said as it's a fee it's all acedemic


e.g.

suppose you have a saving a/c that pays 0.1% on amount less than 1000 and pays 3% on amounts of 1000 and more

if you have 1000;
is you interest rate 30/1000 i.e 3% AER
or 30/0.01 i.e 300,000 % AER

Cell

Well what if there was no buffer zone and the account went overdrawn by 1p?

Same difference.;)

And no it's not interest, but cash is cash whatever name you give to it.

CLAPTON

Cell wrote: »

Well what if there was no buffer zone and the account went overdrawn by 1p?

Same difference.;)

And no it's not interest, but cash is cash whatever name you give to it.

well

you can work out a variety of way of looking at things

but the question was what is the APR which I have answered

if the question had been different doubtless there would have been a different answer