General information
Overdrafts are a type of credit linked to your Monzo current account. They're designed for short-term borrowing - please don't use an overdraft to gamble or invest.
If you're eligible, we can offer you an authorised overdraft (a limit you agree with us in advance). When you apply we'll run a credit check, which may leave a mark that other lenders can see.
How pricing works
You'll pay a €2.00 monthly fee for having an authorised overdraft, no matter what limit you choose and even if you don't use it. If you borrow, we charge interest on the days you're actually overdrawn. Interest is calculated daily on the amount you've borrowed, then added up and collected together with your €2.00 fee on the 1st of each month.
Your first month's fee will just cover the days from when you set up your overdraft to the end of that month. For example, if you set it up on the 20th, you'll only pay for those last few days. We'll take that fee on the 1st of the next month.
We'll take the fee and any interest even if there isn't enough money in your account, which may put you into overdraft or further into it if you already are.
You can cancel your overdraft any time in the app. We'll stop charging the monthly fee from the day you cancel. You'll still owe a pro-rata fee and any interest up to that date, which we'll collect on the next 1st.
Going into an unauthorised overdraft
If there isn't enough money in your account, or you go over your authorised limit, you may enter an unauthorised overdraft. Some payments may be declined and you won't be able to withdraw cash.
We don't charge separate fees for unauthorised usage, but you should bring your balance back above €0 as soon as possible. If you don't, we may need to report arrears to credit registers, which could make it harder for you to borrow in future.
Managing your overdraft
If you're close to or in your overdraft, we'll send you an alert. You can manage or turn off your overdraft any time in the app.
We charge interest on your total overdrawn balance each month, including any previous charges you haven't repaid, so the cost can grow if you don't pay it back.
Using your overdraft for short-term borrowing only
As a responsible lender, we review how overdrafts are used. If we see your overdraft is being used for long-term borrowing, such as staying overdrawn for extended periods without credits, we may ask you to make a payment to reduce your balance. We'll always tell you how much, by when, and give you at least 30 days' notice.
Chat to us if you have difficulties managing your overdraft
If you can't pay, or you're experiencing financial difficulty, it's best to talk to us as soon as you can, as there are ways we can help.
Being behind could have severe consequences. For example, we might take legal action against you or ask you to repay the entire balance.
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