Monzo Overdrafts
Arranged overdrafts are a safety net for unplanned surprises. They’re designed for short term borrowing and they’ll cost less if you pay them back quickly.
18+ only. Eligibility criteria and Ts&Cs apply.
An overdraft you’re in control of
12.7% EAR (variable)
If you use an arranged overdraft, you’ll pay interest on the amount you borrow.
You only pay interest for the days you’re overdrawn. We calculate interest daily and charge it monthly.
You’ll pay €2 a month for having an overdraft
You’ll pay this monthly fee for having an overdraft set up, even if you don’t use it.
Your first fee will be calculated from when you set up your overdraft, until the end of that month.
For example, if you set it up on the 20th, we’ll only charge you for the last 10 or 11 days of that month. We’ll take the fee on the 1st of the next month. After that, you’ll pay the full €2 on the 1st of each month.
Limits of up to €2,000
If you’re eligible, you could have an overdraft limit of up to €2,000. This limit won’t apply to everyone – we consider what people can safely afford to borrow.
You can change your limit and cancel your overdraft any time on the Monzo app. To do that, you’ll need to pay back the amount you owe, plus any interest. You’ll pay your monthly fee (pro-rated) up until the time your overdraft ends.
How does our overdraft compare?
Our representative APR is 15.4% APR (variable). If you use an arranged overdraft of €1,000 for 12 months, you’ll pay about €120 in interest and the €2 monthly fee. The total amount repayable is €1,144.
Arranged and unarranged overdrafts
When you switch on an overdraft with Monzo that's called an arranged overdraft. If there isn’t enough money in your account, or you go over your authorised limit, you may go into an unarranged overdraft. Some payments can be declined and you won’t be able to withdraw cash.
We don’t charge separate fees for unarranged use, but you should bring your balance back above €0 as soon as possible as it could impact your credit record (which can make it harder for you to borrow in the future).
Offline payments – We can’t reject “offline” payments, like those you make on a plane, so you’ll go into an unarranged overdraft. We’ll tell you as soon as this happens. You should add money to your account as soon as possible, as it could impact your credit report (which might make it harder for you to borrow in the future).
Understanding your rates
EAR
EAR stands for effective annual rate. It’s the interest rate you’ll pay if you’re overdrawn for a year. You’ll pay interest on the amount you’re overdrawn by, including any interest that builds up over time. EAR doesn’t include any fees, like the monthly overdraft fee.
APR (variable)
APR stands for annual percentage rate. It includes both interest (EAR) and any fees. This means it shows the total cost of your overdraft over a year.
Variable means we can change the rate, but we’ll always give you notice if we do.
Representative APR
Representative APR is the rate we offer to at least 51% of people who apply. It’s useful for comparing different credit products.
Warning: If you do not meet the repayments on your overdraft, your account will go into arrears. This may affect your credit report, which may limit your ability to access credit, a hire- purchase agreement, a consumer-hire agreement or a BNPL* agreement in the future. *BNPL: Buy Now Pay Later.
Notice: Under the Credit Reporting Act 2013 lenders are required to provide personal and credit information for credit applications and credit agreements of €500 and above to the Central Credit Register. This information will be held on the Central Credit Register and may be used by other lenders when making decisions on your credit applications and credit agreements. The Central Credit Register is owned and operated by the Central Bank of Ireland. For more information see www.centralcreditregister.ie.
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