Student Bank Accounts - Guide to Student Overdrafts - Current Accounts - NatWest

Be Uniproof A guide to student overdrafts

Anyone going to university knows that their finances could be stretched whilst they’re studying. Every last penny of your maintenance loan, bursary, grant, or extra help from parents all matters.   An arranged overdraft could also be helpful if you find that your outgoings occasionally exceed your income.  In addition to sound budgeting, an arranged overdraft could help you to manage your finances when it’s used sensibly.

Here is our helpful guide to managing your student arranged overdraft.

First of all, what’s an arranged overdraft?

An arranged overdraft is a form of credit, agreed in advance with the bank, that is available to you when you spend more money than your account holds. An example of this would be if you had £50 in your bank account and you spent £60, then you would be -£10 into your overdraft.

Overdrafts are repayable on demand and you’ll need to be 18 or over.  Whilst, generally, there may be no fee charged if you stay within the agreed limit, an overdraft is a form of debt and you’ll need to pay it back over time.  An unarranged overdraft is when you have not arranged an agreed limit in advance but have spent more than is in your account, or when you go over your arranged overdraft limit.  This can result in fees and interest and should always try to be avoided.

So how do I manage it?

Design yourself a simple budget using a spreadsheet or a sheet of paper.  Listing all of your income and outgoings will help you to plan to keep your account in credit . Be mindful that your overdraft should be there to help meet unexpected costs.  Don’t consider it to be expendable income.

Still have questions.  Find out more about our student bank account.  Or, if you’re an international student, you can find out more here.

NatWest Student Account Don't have a student account yet?
Learn more about our Student Account
Set Tab for lightbox