How Long Do I Get To Pay Back An Overdraft?

Roxy07

Short story short, I've had to use my overdraft of £2000 for Christmas.. but I can't pay it back straight away.

Will the bank expect me to pay it back instantly or as long as i'm making payments and the overdraft decreases each month I won't get into debt, interest added and bad credit rating?

I suffer with bad anxiety and depression so please be gentle.. thanks

Ben8282

Under normal circumstances, overdraft facilities are given on current accounts which receive the account holders income. The overdraft (or a substantial portion of it if the overdraft limit is greater than monthly net income) is then in theory repaid each month, then used again as necessary.
Assuming this is an authorised overdraft, instant immediate repayment will not be required.
You mention interest being added. I don't know your bank or account type, but you can be sure that fees and/or interest will be charged for using the overdraft facility.
You will not get a 'bad' credit rating although prolonged or frequent use of overdraft facilities can be viewed as a sign of financial stress.
So long as funds are regularly being paid into this account and the account is being used, then you should not have any significant problem.

PeacefulWaters

Roxy07 wrote: »

Short story short, I've had to use my overdraft of £2000 for Christmas.. but I can't pay it back straight away.

Nobody has to use their overdraft to pay for Christmas, let alone blowing £2,000 on it. Learning point is that the timing of Christmas isn't really a shock. If you want to spend big you have the chance to save up during the year. If you don't save enough there is no need to spend large.

Will the bank expect me to pay it back instantly

Probably not. But overdrafts are repayable on demand, the bank can choose to call the debt in if they wish.

or as long as i'm making payments and the overdraft decreases each month I won't get into debt, interest added and bad credit rating?

Crediting salary (or other funds) monthly and having a reducing overdraft balance is the best way to keep the bank happy.

You are already in debt. An overdraft is a debt.

You should familiarise yourself with what fees and interest charges your bank will make for you being overdrawn. It's possible that certain credit cards could be a cheaper way of borrowing than an overdraft.

As far as credit rating goes, having £2,000 in debt can be seen as negative. Ensuring that debt is managed satisfactorily is a positive.

AnotherJoe

What PW said, perhaps try the DebtFree Wannabee board if you think borrowing £2k for xmas spending is not, on reflection, a reasonable thing to do.

Dobbibill

Roxy07 wrote: »

Short story short, I've had to use my overdraft of £2000 for Christmas.. but I can't pay it back straight away.

Banks don't generally offer an overdraft with the intention of calling it in immediately (although it is possible they can, normally triggered by no credits to the accounts or other risky behaviour).

It will normally remain available to use on an ongoing basis.

Will the bank expect me to pay it back instantly or as long as i'm making payments and the overdraft decreases each month I won't get into debt, interest added and bad credit rating?

* no, not normally expected to be repaid instantly
* decreasing each month is the right way if you cannot afford to repay all at once.
* I have to correct you when you say you won't get into debt. An overdraft is debt.
* you normally have to pay for the privilege of an overdraft of that size - either daily fees of £1 or interest. You will be notified of the charges before they are taken.
* It's not going to give you a bad credit rating as such. If you applied for other borrowing lenders would see another lender trusts you enough and is willing to lend you the overdraft amount (which is good) but they will also see you are using it regularly (which means you can't live within your means (which is not so good).

As well as paying off the overdraft remember that Christmas is going to happen again in December 2017. If your normal costs for the festive season is £2k then you also need to look at saving approx £167 pcm too.

Roxy07

Thanks

How long do you think the bank will give me to pay it off before they start sending nasty letters? or will they be happy with it decreasing gradually each month?

PeacefulWaters

Roxy07 wrote: »

Thanks

How long do you think the bank will give me to pay it off before they start sending nasty letters? or will they be happy with it decreasing gradually each month?

Gradual decrease should be fine as long as they see something resembling a wage being credited regularly.

If your only transaction is chucking £30 a month into the account then you might get problems.

If you pay in £1,000 and withdraw £970 (less any overdraft fees and interest) you should be ok. Hopefully.

[Deleted User]

Hi,

just google 'your bank' overdraft fees.

Some charge % and some charge a fixed amount each day.