Extending Overdraft?

jbond

Hi, I have done a search for this one, before posting this, but nothing seemed to come up that was relevant.

Currently have an overdraft, which I'm considering applying to extend slightly, however, I'm a little nervous about it.

If I was to be turned down, for whatever reason they give, is there any risk that I could lose the current overdraft too?  Has that ever happened to anyone?

I'd like to apply, but concerned about rocking the boat so to speak!

All that google seems to come up with, is information about applying for an overdraft, but not extending it.

Is there a credit check involved, and if so, hard or soft?

While I appreciate any input on this, I'm not after budgetting advice or criticism, so if you're just going to respond like that, don't bother.

Thanks!

mr_stripey

All that google seems to come up with, is information about applying for an overdraft, but not extending it.

I think to all intents and purposes the lender will view the extension of the overdraft in the same way as a "new" overdraft - i.e. you are borrowing (more) money (or at least applying for the ability to be able to do so) and they will assess your ability to repay it and their risk of this not happening.

eskbanker

Applying for additional credit wouldn't affect their position on what you already have, so there's no concept of 'rocking the boat' - they could review your facility at any time though.

You've presumably exhausted other avenues for more cost-effective and sustainable borrowing?

MEM62

There is always a risk to extending an overdraft.  Not only is it a very expensive way of borrowing money, it is also high risk from the viewpoint that the facility can be withdrawn at any time.  Being deep into your overdraft on a regular basis shows that your finances are stressed.   

mr_stripey

In fairness the OP hasn't stated whether is actually using the existing overdraft or not.

jbond

eskbanker said:

Applying for additional credit wouldn't affect their position on what you already have, so there's no concept of 'rocking the boat' - they could review your facility at any time though.

You've presumably exhausted other avenues for more cost-effective and sustainable borrowing?

I'm looking at various options at the moment, I'm just assuming that the overdraft would be the 'easiest' application, as you're logged in when applying, so they can see you income/expenses anyway, so I wouldn't need to provide that?

I take it there is no hard or soft check done then, as if that came back bad, they might cancel the existing one?

Sorry, I don't really know how the overdrafts side of things works (apart from the charges I mean).

Daliah

Overdrafts are one of the most expensive ways to borrow. You should only applt for them as a last resort. You cannot assume that no hard credit check will be performed, as some will make one, regardless of ant existing overdraft.

Also, overdrafts are repayable in full on demand, meaning that your best efforts to reduce the overdraft could be null and void.