How much is your overdraft in relation to your income?

fiat_lux

I've always set my overdraft in line with the fee-free limit. It used to be £300 or £250. Last year though I set my overdraft just slightly higher than my monthly mortgage payments, at £1000 (this is also fee free).

I've never used it though, and I hope I won't need it.

oldagetraveller

No overdraft personally.
O.P. seems to like getting into debt though. https://forums.moneysavingexpert.com/discussion/6026443/default-on-catalogue-from-2015-still-on-credit-report
Are they looking to have their overdraft written off too?

nicetomeetyou

oldagetraveller wrote: »

No overdraft personally.
O.P. seems to like getting into debt though. https://forums.moneysavingexpert.com/discussion/6026443/default-on-catalogue-from-2015-still-on-credit-report
Are they looking to have their overdraft written off too?

Actually I don't like getting into debt! Does that mean all the people on here who are in debt like getting into debt too in your blanket statement?

bertiewhite

Mine used to be twice my monthly take home pay with Natwest but at my insistence, they reduced it to less than a third.

PRAISETHESUN

Mine's about a month's salary. Personally I find it convenient to have, although if I'm ever in a situation where I'd need to use it then something's gone terribly wrong. It is an expensive way to borrow, and you shouldn't be using it to tide you over until pay day - if you are likely to head down that path then I'd personally suggest reducing/removing it.

Terry_Towelling

oldagetraveller wrote: »

No overdraft personally.
O.P. seems to like getting into debt though. https://forums.moneysavingexpert.com/discussion/6026443/default-on-catalogue-from-2015-still-on-credit-report
Are they looking to have their overdraft written off too?

I suspect an ulterior motive in order to buy a fancy Omega watch.

MEM62

Monthly net income circa £3K


Overdraft = 0

colsten

Overdrafts are one of the most expensive forms of borrowing. Some even cost more than payday loans. You should avoid using overdrafts at all costs, and you shouldn't feel encouraged by the size of other people's overdrafts. It is not a contest. You are not a better person if you have a larger overdraft, just a financially more desperate one.

Be aware also that banks can recall overdrafts without notice, and if you want to switch your account, you must immediately settle your overdraft and there is no guarantee that the new bank would give you an overdraft facility of the same size, or any at all.

Consider building your own overdraft facility. Gradually save up an emergency balance, in an interest-paying instant access account. Never touch it except in an extreme emergency.

Generally speaking, you should have an emergency balance of approx. 6 months living costs. You can leave a buffer amount of a couple of hundred or so in your current account, just in case you mess up on e.g. regular payments. Having said all this, if you have self-discipline, for added security, you could have an overdraft facility and just not use it, to cater for any oversights.

Gers

I've had a £750.00 overdraft facility on what used to be my main current account - been in place since approx 1985 and never used it!

One day I will get round to getting it removed.

jonesMUFCforever

Going back 20 years I would agree that normally a person's monthly salary would be the normal maximum that a bank would grant you - but in those days decisions were made by humans.
Nowadays mega computer programmes determine what they will give you so IMO the old month salary limit is no more.