How long can you be in your overdraft for? Watch

yaaaas
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I’m running out of money (I’m getting minimal loan) and I’m thinking, if I start using my overdraft now, will it be okay if I pay it off in January when next loan instalment comes in?

It says ‘the Total Cost of Credit for using your arranged overdraft for 3 months is £0.00. This assumes you borrow the full amount of your arranged overdraft for the full 3 month period and the daily arranged overdraft fee does not change.’


But then it says ‘we ask that you make regular payments into your account while using overdraft’ and I will have no regular income until January so won’t really be able to pay money in?

Should I be alright? If that makes a difference I’m final year student banking with Lloyd’s.
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Reality Check
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(Original post by yaaaas)
I’m running out of money (I’m getting minimal loan) and I’m thinking, if I start using my overdraft now, will it be okay if I pay it off in January when next loan instalment comes in?

It says ‘the Total Cost of Credit for using your arranged overdraft for 3 months is £0.00. This assumes you borrow the full amount of your arranged overdraft for the full 3 month period and the daily arranged overdraft fee does not change.’


But then it says ‘we ask that you make regular payments into your account while using overdraft’ and I will have no regular income until January so won’t really be able to pay money in?

Should I be alright? If that makes a difference I’m final year student banking with Lloyd’s.
Student bank account overdrafts are different from regular account overdrafts regarding the need to make regular credits. The bank understands that for many students, their SFE funding is the only income source, so long as that has been paid into the account at the right time, there will be no problem with using the overdraft without making regular credits.

This is subject to your operating the account satisfactorily - eg, not going over your overdraft limit, writing cheques that are dishonoured through lack of funds etc.
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Reality Check
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You'll also find that so long as you've operated the account well, you'll probably be offered a 'graduate account' when you come to the end of your studies. This will allow you to carry forward any overdrawn balance, but the overdraft limit will gradually taper downwards over a couple of years, allowing you to repay the balance sensibly. They're often worth going for.
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yaaaas
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(Original post by Reality Check)
You'll also find that so long as you've operated the account well, you'll probably be offered a 'graduate account' when you come to the end of your studies. This will allow you to carry forward any overdrawn balance, but the overdraft limit will gradually taper downwards over a couple of years, allowing you to repay the balance sensibly. They're often worth going for.
Great thanks! I misused my overdraft in my second year as I was mainly using my classic account and wasn’t paying any money into my student account, then used all £1500 up! They sent me a letter after 4 months of me being fully into my overdraft that I need to pay money in and I slowly paid it off through working over summer etc.

So now I’m just a little worried to be overdrawn again even if it’s only for two months lol. It should be alright though, as you said student accounts aren’t as strict id think
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(Original post by yaaaas)
Great thanks! I misused my overdraft in my second year as I was mainly using my classic account and wasn’t paying any money into my student account, then used all £1500 up! They sent me a letter after 4 months of me being fully into my overdraft that I need to pay money in and I slowly paid it off through working over summer etc.

So now I’m just a little worried to be overdrawn again even if it’s only for two months lol. It should be alright though, as you said student accounts aren’t as strict id think
Yes, exactly. A classic account with a large overdrawn balance and no credits will automatically flag up a warning, whereas a student account with no regular credits is to be expected. Plus, the student account has a fee-free and interest-free overdraft!
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