Should I Leave my Overdraft Unpaid?


There are many financial decisions that we need to make and they can be really important. They can influence out credit report, how much money we have and our stress levels. They can be crucial in our relationships as well and so it is really important to make sure that we make the right decisions so that we can manage things as well as we can. Therefore, when we are asking ourselves questions like whether to repay our overdraft or not, then we need to give it a great deal of thought. It is important to consider the advantages and disadvantages so that we can decide whether it is the right decision for us or not and also think about the longer-term impact that it might have.


It is a good idea to work out how much it will cost for you to do this with your overdraft. You will find that the overdraft cost is a percentage, which refers to how much interest would be charged if you kept the debt for the year. So to then work out how much it will be per month, week or day you will have to do some calculations. It is a good idea to work out how much it will be, because then you will be able to decide whether you think that it is worth it. You will be paying each day for owing the money and you will need to decide whether this is something that you think is worth it or not. You need to calculate the cost so that you can decide whether you are happy to pay that charge for holding the loan. If you do not think that it is good value then you should be trying to get it paid off.

Credit Record

It is also worth knowing that it will show up on your credit record. You may not worry too much about this, but it could be important. If you want to borrow a larger loan, perhaps a mortgage, for example, your credit record will be looked at in detail. If it is seen that you are holding an overdraft and not repaying it, then it will be frowned upon. Lenders want to look and see that they will be able to trust you and they will not like the fact that you have this unpaid loan and so it is a good idea to make sure that you are aware of this and consider this. Also, others will look at your credit report too, insurers and landlords, for example and it could lead to you having to pay more for your insurance because you are seen as a risk or you may even be turned down for a home. So, it is really important that you think of the consequences of this.


It can be stressful owing money. Even if you think that you are okay with it, it could get on top of you after a while. You could worry about the money needing to be paid or it could be the consequences of owing it that are a problem. It is worth thinking about whether this could have an impact on you. Of course, the extent of the impact will also depend on how much money you actually owe and what income you have and things like this, so it is worth having a think about your personal circumstances and what things are likely to happen in the future so that you can decide on how it will impact you. Try to consider a worse case scenario to ensure that you make the right decision.

Should I Increase my Overdraft Limit?


When we have an overdraft, we are given a certain limit. This is how much money we are allowed to borrow using the overdraft. The amount that we are given will vary. It could change depending on the bank that we have our account with and also with our own credit record. However, at times, we may have an opportunity to increase our overdraft limit. This could be because the bank we have our current account with is offering us the opportunity to do this or it could be because we have found an alternative account which offers a larger one. Either way, it is wise to think about whether it is a good idea to increase ethe overdraft limit or whether you should keep it as it is.

Consider why you want it bigger

It is good to start by thinking about the reason why you want the overdraft to be larger. Think about whether it is a good or bad reason. If you are worried that you might have an emergency and need more money, then it could be a good idea. If you want to borrow more money so that you can help pay for necessities then perhaps it is okay, but if you are looking for extra money to pay for luxuries then it is a good idea to no have one. This is because you need to think about the cost of the overdraft. Often it can be as much as 40% interest on the overdraft and therefore you need to think about whether that cost is worth it.

Can you afford a bigger one?

This interest may not seem a lot when it gets added on monthly, but you need to think about how much it will cost you in total. Is it money that you can actually afford to pay out? Consider how much you pay for things and whether you really want that much money to be going towards just paying the bank when you could have it for spending. It is also worth thinking about how you will feel about having a larger overdraft and whether you feel that you will be able to cope with the thought that you owe that money. Some people get really stressed when they owe money and if this is the case for you, then owing more money could be something that you want to avoid.

Will it Actually Benefit you?

It is also worth thinking about whether the overdraft will actually really benefit you. Consider what you are going to be using it for and whether it is worthwhile. Think about the cost that it will be and whether you think it will give you good value for money. It is good to also think about whether you might just use it as a way to spend more money than you have without any real thought for how you are going to manage that. Remember that you will need to repay it, it is not money that you are entitled to and you will be charged for using it. You need to think carefully about the consequences of this.

It might seem like quite a small decision, but you actually should think very carefully about this. It could mean that you will end up with lots of debt to repay and it could leave you feeling stressed. You need to carefully weigh up the pros and cons and make sure that you are really sure about doing it and that you feel it will be the best thing for you to do right now.