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Hsbc student overdraft watch

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    When i got a student bank account i got a 500 pound interest free overdraft and i was hoping to use some of it to buy christmas presents for my family and im a bit confused, if i use that now in the next couple of weeks, how fast do i have to pay it back? Or will it come out of my next student loan payment?
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    (Original post by amazingstaitofh)
    When i got a student bank account i got a 500 pound interest free overdraft and i was hoping to use some of it to buy christmas presents for my family and im a bit confused, if i use that now in the next couple of weeks, how fast do i have to pay it back? Or will it come out of my next student loan payment?
    An interest free overdraft is essentially a free loan from the bank. There is no obligation to pay it back within a certain period of time (of course, you eventually have to pay it back). But since you have a student account, this overdraft will last until you finish university. Therefore your bank balance can be -£500 until then without inciting any interest.

    If you take out the whole £500, when your next student loan comes in (say £2000), your bank balance will show £1500. However, you will still be able to take use the whole £2000 without incurring interest.

    TL;DR -£500 is essentially the new £0 in this situation.
 
 
 
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