dpws-tools-calculator-creator
This is not intended to be a precise tool. But it can indicate the overall costs incurred when you repay your overdraft balance over a specific amount of time.
This calculator is for arranged overdrafts only. The overdraft cost table shows the amount of interest that applies to each current account.
If your monthly repayment amount is lower than the monthly interest, and you can’t increase it, please get in touch so we can look to help. To get things started, please complete an income and expenditure form.
Representative example
Based on an assumed arranged overdraft of £1,200 for an HSBC Bank Account, the rate is 0% EAR (variable) on the first £25.
Above £25, the rate rises to 39.9% EAR (variable). This gives a representative rate of 38.9% APR (variable).
The representative APR shows the cost of borrowing over a year. This means you can use it to compare the cost against other overdrafts and ways of borrowing.
Using this calculator
Assumptions
This calculator uses a 30.5 day monthly interest cycle. This means each month has the same number of days, and the interest does not fluctuate. If your balance does fluctuate during the month, the calculator may give you inaccurate results.
This calculator takes account of the interest-free amount relevant to the account type selected.
It assumes the interest rate is 39.9% EAR. If your rate is different to this, the calculator will not give you accurate results.
Please make sure any figures you put in are accurate.
The figures the calculator gives are only an indication.
Glossary of terms
Overdraft interest rate - the interest rate you pay if you go into overdraft.
Arranged overdraft limit - the maximum amount of money you can borrow using an arranged overdraft.
EAR - stands for Effective Annual Rate. It takes account of the interest rate and how often interest is charged. It does not include any other fees or charges.
APR - the annual percentage rate shows the cost of borrowing over a year including interest and any other fees or charges that may apply. This figure can be useful when you're comparing the cost of overdrafts, or other types of borrowing.
Overdrafts
Arranged and unarranged overdrafts
An overdraft is a way of borrowing money through your current account.
You’ll go into overdraft if you make a withdrawal or a purchase that takes you below your available balance. In other words, if your account goes below £0, you’re into your overdraft.
If you've agreed an overdraft limit with us in advance, it's known as an 'arranged overdraft'. If you haven't – or if you've gone past your arranged limit – it's known as an 'unarranged overdraft'.
Most of our accounts (except our Basic Bank Account) come with an interest-free buffer. If you borrow more than this, you'll need to pay interest on the amount you've borrowed. This applies to both arranged and unarranged overdrafts.
You can pay your overdraft back by transferring money into your current account. Even if you can't pay it all off in one go, transferring smaller amounts will reduce the amount of interest you’re charged.
To apply for an arranged overdraft you’ll need to be 18 or over. All overdrafts are repayable on demand. Credit is subject to status.
The maximum monthly charge in interest for going above your overdraft is £20 per month.
Monthly cap on unarranged overdraft charges
1. Each current account will set a monthly maximum charge for:
(a) going overdrawn when you have not arranged an overdraft; or
(b) going over/past your arranged overdraft limit (if you have one).
2. This cap covers any:
(a) interest and fees for going over/past your arranged overdraft limit;
(b) fees for each payment your bank allows despite lack of funds; and
(c) fees for each payment your bank refuses due to lack of funds.