What is an arranged overdraft? expandable section
An arranged overdraft allows you to borrow up to a limit based on your requirements and personal circ*mstances and agreed with us in advance. You can apply for an arranged overdraft if you have a Classic, Club Lloyds, Silver / Club Lloyds Silver, Gold / Club Lloyds Gold, Platinum / Club Lloyds Platinum, Premier / Club Lloyds Premier, Student, Graduate or Select account.
Duration of arranged overdraft
Your arranged overdraft will continue indefinitely unless we specify an end date or you ask to end it. We will carry out a review of your arranged overdraft at least once every 12 months.
You need to be 18 or over to apply. How much we lend depends on our assessment of your personal circ*mstances. All overdrafts are always repayable on demand. We can also reduce your arranged overdraft limit at any time. We will normally give 30 days’ notice before making any changes.
How is interest charged on our arranged overdrafts? expandable section
If you do need to use your arranged overdraft, you’ll pay daily arranged overdraft interest at the end of each day making it easier to keep track of what’s going out.
If you use your arranged overdraft but pay it back before the end of the day, then you won’t pay any arranged overdraft interest for that day.
You can keep track of your balance through internet or Mobile Banking, in branch or through Telephone Banking.
If you have an interest-free amount with your arranged overdraft you’ll only pay daily interest if you borrow more than the interest-free amount.
Daily arranged overdraft interest is charged at the end of each day that you use your arranged overdraft, making it easier to keep track of what's going out of your account.
If you go over your limit
If you don't have enough money in your account or enough available arranged overdraft, we may either let you borrow through an unarranged overdraft or we will refuse to make the payment. We won't charge for either of these but if we refuse to make the payment, then this could mean your mortgage or rent as well as other commitments may not be paid and some suppliers may charge you fees for missing those payments.
Read our Personal Banking Terms and Conditions & Banking Charges guide (PDF)
What happens if you're overdrawn or a payment is rejected? expandable section
Grace period
We make payments from your account shortly after midnight at the start of the due date. If your payment date falls on a non-working day, then we will try and collect your payment the next working day.
If you don’t have enough funds in your account at this point to make a payment, we will try the make the payment again after 2.30pm the same day. This gives you the chance to put extra funds into your account so that we can make the payment. The funds need to be available to use straight away, so you could transfer money from another personal account you have with us via Internet, Mobile or Telephone Banking or pay in cash over the counter in branch.
For Cheque and Direct Debit payments, if there are not enough funds in your account at 2.30pm the payment will be returned and you may need to make alternative arrangements to make the payment.
For Standing Order and Future Dated Payments we will try to make the payment on the next working day after the payment was originally due. If there are not enough funds in your account at this point, the payment will be returned and you may need to make alternative arrangements to make the payment.
If a payment takes you into any arranged overdraft, you have until the end of the day to pay money into your account to avoid daily arranged overdraft interest for that day.
Certainly! I'm well-versed in financial products and arrangements, particularly in banking services like overdrafts. Here's the breakdown of the concepts mentioned in the article about arranged overdrafts:
Arranged Overdraft
An arranged overdraft is a credit facility provided by a bank that permits an account holder to borrow up to a predetermined limit. This limit is agreed upon in advance and is based on the individual's financial circ*mstances. It's available for specific account types like Classic, Club Lloyds, Silver, Gold, Platinum, Premier, Student, Graduate, or Select accounts. The overdraft remains open until either the bank sets an end date or the account holder requests to terminate it.
Overdraft Duration and Reviews
Arranged overdrafts continue indefinitely, subject to periodic reviews conducted by the bank at least once every 12 months. The assessment of the overdraft limit depends on the account holder's financial situation. It's essential to note that all overdrafts are repayable on demand, and the bank holds the right to decrease the arranged overdraft limit, providing a 30-day notice before implementing any changes.
Interest Charges
Interest on arranged overdrafts is calculated daily and charged at the end of each day, simplifying the tracking of expenses. If the overdraft is used but repaid within the same day, no interest for that day is incurred. The interest is applicable only if the borrowed amount exceeds any interest-free portion associated with the overdraft.
Overdraft Limit and Payments
If an account goes over its limit, the bank may permit borrowing through an unarranged overdraft or refuse the payment. There are no charges for these actions, but refusal to make a payment might lead to non-payment of essential commitments like mortgage or rent, potentially incurring additional fees from suppliers.
Handling Overdrawn Situations
There's a grace period for payments; attempts are made shortly after midnight on the due date. If funds are insufficient, the bank may attempt the payment again after 2.30 pm on the same day, allowing time to deposit extra funds. For different payment types like cheques, direct debits, standing orders, or future dated payments, there are specific procedures and timelines outlined for handling insufficient funds.
Understanding these aspects of arranged overdrafts helps in managing finances effectively and avoiding additional charges or missed payments.
