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a few overdraft Qs

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  • 22-03-2011 5:44pm
    #1
    dollydishmop
    Registered Users Posts: 561 ✭✭✭


    Hi all

    Have an account ticking over with UlsterBank.

    Have a couple of 'once-off' payments I need to make at the end of the month...and was considering asking for a small overdraft to facilitate this.

    But I'm confused as to what I'll have to pay for the privilege of using this overdraft, should they be gracious enough to grant it :rolleyes:

    They are giving a rate of 14.55% (I'm assuming that's annual, yes?)

    If I ask for an overdraft of €300 but perhaps only need to use €200....am I paying the 14.55% on the full €300....purely because its available to me...or do I pay the 14.55% only on the €200 because that's the amount I actually used.

    Also, I only need it short-term...2 months max...will they do this?


Comments

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    #2
    coylemj
    Registered Users Posts: 25,437 ✭✭✭✭coylemj


    Assuming you pass the credit check and they approve the overdraft facility, you will only pay interest on the amount by which you are overdrawn, not the limit agreed with the bank. But if you manage to go over the limit they will screw you with penalties so make sure you ask for enough headroom.

    They may charge an 'overdraft fee' which would be a one-off charge in your case, I have to pay it every year to Bank of Ireland. In theory this is to cover the administrative expense of setting up the facility in the first place i.e. the few seconds it will take an official to key in the details into the system.

    The interest rate sounds very high, are you sure it's over 14%?

    By the way, if your credit history is good you might be better off asking for a limit of 1,000, they might just reject you if they think the amount is too small and it's not worth the bother of setting it up. They will not penalise you if you don't go up to the limit and you might even get a better rate of interest.


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    #3
    dollydishmop
    Registered Users Posts: 561 ✭✭✭dollydishmop


    coylemj wrote: »

    The interest rate sounds very high, are you sure it's over 14%?

    Wow! Quick reply! Thanks :D

    Yes, I thought the rate was high enough for an 'approved' overdraft too :rolleyes: ....but here it is, on their website: Ulster Bank - Overdraft Overview
    I just have a bog-standard current account....so it's 14.55% whether I ask for €100 or €10,000

    Your comment about asking for a higher amount makes a lot of sense - definitely something to think about. But I don't want to give myself too much temptation... :eek::pac: ...but perhaps I might think about asking for a limit of €500 instead, then I know I won't be anywhere near it with the payments I need to make.


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