Important information about overdrafts
Overdrafts are not available on Danske Discovery or Standard accounts.
An overdraft is a form of short-term borrowing, a safety net that allows your balance to dip below zero if you don’t have enough in your account to meet an unexpected payment. Another way to borrow in the short term is a credit card, but if you need to borrow money over the longer term, a personal loan may be more suitable.
There are two types of overdraft – arranged and unarranged.
As the name suggests – an arranged overdraft has been pre-agreed with us up to a set limit, giving you peace of mind that you'll be able to make unexpected payments or get money in an emergency. You can borrow from it any time, as long as you stay within your limit. There may be costs to pay with an arranged overdraft.
An unarranged overdraft is when your account balance either goes overdrawn without an arranged overdraft in place, or goes beyond your arranged overdraft limit. When this happens, we'll look at your circumstances when we're deciding whether to allow any further payments from your account. There may be costs to pay with an unarranged overdraft.
Some of the risks of having an overdraft
We can ask you to repay your overdraft in full at any time.
If you rely on your overdraft, even an arranged one, it may have a negative effect on your credit file and your ability to borrow money in the future.
If you try to make a payment from your account and you don’t have enough money:
- The payment may be declined which could have other consequences, for example if you don't make a car insurance payment on time, you may not be insured to drive.
- The company to which you pay the Direct Debit might also try to take it again before you’ve had a chance to lodge money into your account.
- You may be charged fees.