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Will DDs and SOs work when in overdraft?

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  • 07-10-2008 9:42pm
    #1
    Random
    Closed Accounts Posts: 19,080 ✭✭✭✭


    If one has a €2k overdraft on their account and they're well into it - will direct debits and standing orders still come out of it?

    I don't see why they wouldn't as the overdraft is effectively a short term loan .. but thinking there might be some loophole somewhere?

    Will try ring the bank tomorrow but just to get some general thoughts.

    THanks


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    #2
    unclebill98
    Registered Users Posts: 3,816 ✭✭✭unclebill98


    Yes, as long as the s/o or DD does not exceed the over draft limit.


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    #3
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    Random wrote: »
    If one has a €2k overdraft on their account and they're well into it - will direct debits and standing orders still come out of it?

    I don't see why they wouldn't as the overdraft is effectively a short term loan .. but thinking there might be some loophole somewhere?

    Will try ring the bank tomorrow but just to get some general thoughts.

    THanks

    Depends.

    For example - if you have available credit to pay all the D/D's and S/O's then they will be paid.

    However if your credit limit is breached, the bank in question will decide if they want to pay or not based on your track record. The specific concept here is called "tolerance". If you have a good track record of meeting your payments on time the bank may give you some tolerence. However if the opposite is true then they may give you little or none. Therefore they may decide to return payments.

    It might be a good idea to forewarn the bank if you think you might go over your overdraft limit because of a D/D or S/O.


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    #4
    Random
    Closed Accounts Posts: 19,080 ✭✭✭✭Random


    I should clarify what I mean, maybe didn't explain it very well.

    Example 1
    I have bank account with 1k overdraft. Account balance is 500 credit. DD is 200.
    DD is paid.

    Example 2 (this is what I'm asking)
    I have bank account with 1k overdraft. Account balance is 300 debit. DD is 200.
    DD is paid??? OR not?

    Example 3 (this is what I think you think I'm asking but I'm not ..)
    I have a bank account with 1k overdraft. Account balance is 900 debit. DD is 200.
    DD not paid I would assume as no funds available.


    ++ edit .. just noticed unclebill98's post. That's the answer I'd be hoping for !


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    #5
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    As with anything it's not just as simple as a yes or no answer. Invariably, the decision is someones elses to make if the S/O or D/D exceeds your overdraft limit.

    Once an overdraft limit is approved and you have available funds, D/Ds and S/O's will always be paid.


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    #6
    Random
    Closed Accounts Posts: 19,080 ✭✭✭✭Random


    Right, you've all answered my question then. Provided it's within the overdraft limit then alles ist gut.

    Danke :)


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