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Sole Trader Overdrafts

Overdrafts are designed for short term borrowing, and they’ll cost you less if you pay them back quickly.

Arranged overdrafts can be ideal if you need to borrow a little extra money to see your business through every now and then.

You can apply for credit if eligible and over 18. Ts & Cs apply.

Monzo Overdrafts

Representative EAR/APR of 39% APR representative (Variable)

Overdrafts are available at 19%, 29% or 39% EAR/APR (Variable). As a representative example, if you use an arranged overdraft of £1,200 for 30 days, with representative 39.0% EAR/APR (variable), it would cost you £32.94. Your exact rate will depend on your credit score, and you can see what rate you’re on in your Monzo app. 

Interest is calculated based on your daily balance and applied monthly. We’ll always tell you the exact rate you’ll pay, and what that means, before you borrow from us.

Limits of up to £2,000

If you’re eligible you could have an overdraft limit up to £2,000. This won’t apply to every business and we’re very careful about only giving sole traders what we’re confident they can safely afford to borrow.

You can change your limit and cancel your overdraft at any time from your app. If you want to to do so you’ll need to pay the amount you borrowed back, plus any interest.

No extra fees

We won’t charge you any extra fees for going into your overdraft, and we’ll always tell you when you go into it.

What are EAR and APR?

EAR stands for effective annual rate. This is equivalent to the rate of interest you'll pay if you're overdrawn for a year. You'll pay interest on the amount you're overdrawn by, and on the interest that builds up from being overdrawn. So you'll pay less if you regularly pay off your overdraft. EAR doesn’t include other fees, like hidden or late fees – but we don’t charge these anyway.

APR stands for annual percentage rate. It is calculated in the same way as the EAR plus any additional fees (like hidden or late fees) but we don’t charge these anyway so our EAR and APR are the same.

Representative APR You may see two types of interest, representative and personal. Representative APR is the rate that we currently offer more than half of those who apply for the product. The rate you’re actually offered is your personal APR – this is usually based on things like your credit score.

Variable means we have the right to change the rate, but we’ll always give you notice if we do.

You can use the calculator below to figure out how much you would pay depending on your personal rate.

Arranged and unarranged overdrafts

When you switch on an overdraft with Monzo Business that’s called an arranged overdraft. If you go over your arranged overdraft limit or you don’t have an arranged overdraft we’ll reject payments (for free), but there are some times when we can’t reject payments. We’ve explained how this works below.

If you go over your agreed overdraft limit

We’ll reject any payments that take you over your limit, and you won’t be able to take cash out. The only exceptions are ‘offline’ payments, like those you make to TfL (Transport for London). We can’t reject these, so you’ll go into an unarranged overdraft, but we’ll tell you as soon as this happens. We won’t charge you for unarranged usage, but you should pay this back as soon as possible. If you don’t, we may have to report that you’re in an unarranged overdraft to the credit reference agencies. This could make it harder to borrow later.

If you don’t have an arranged overdraft

If your account is empty, we’ll reject payments unless they’re payments as described. We won’t charge you for unarranged usage, but you should pay this back as soon as possible.

Overdraft cost calculator




If you borrowed £0 for 1 day
from your arranged overdraft


Total cost

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