Learn more about how overdrafts work

What is an overdraft?

An overdraft lets you borrow extra money through your current account. For example, if you have no money left in your account and you spend £30, your balance would be -£30. This means you’re using an overdraft.

An overdraft is a form of debt and is repayable on demand. Always make sure you have enough money in your current account, or a suitable arranged overdraft limit in place before any payments are due to come out of your account.

Typically, you’ll agree an overdraft limit with your bank or lender – this is known as an arranged overdraft.

How does an overdraft work?

There are two types of overdraft: arranged and unarranged.

  • An arranged overdraft is when we agree to a limit that lets you spend a bit more money than you have in your current account. This could help you manage your money if you have to cover short-term expenses such as an unexpected bill.
  • An unarranged overdraft is when you spend more money than you have and you haven’t previously arranged an overdraft limit with us, or you have exceeded your existing overdraft limit.

It's important to remember that both types of overdraft have associated charges but you'll only pay interest if you use it. This interest charge is dependent on your account and you can read full details of this when you apply for an overdraft.

How much does my overdraft cost in pounds and pence?

To help bring this to life, here's an example of the interest cost when you use a £500 arranged overdraft.

How does our overdraft compare?

A good way to compare the costs of borrowing products is by using the APR, which shows the cost of borrowing over a year.

Before you apply for an overdraft

Check your chances of being accepted before applying

Use our overdraft eligibility checker to find out if you’re likely to be approved before you apply. It takes just a few minutes and won’t impact your credit rating.

Find out how much interest you're likely to pay

Use our overdraft cost calculator to see how much interest you’d pay based on your own circumstances and borrowing amount.

How to apply for an overdraft

Already have a current account with us?

You can apply for an arranged overdraft online if you are registered for Online Banking. Take a look at the overdraft available to you and decide if it's right for your needs.

Available to eligible NatWest current account customers, UK residents aged 18 or over. Subject to lending criteria.

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New to NatWest?

You'll need a current account with us before you can apply for an arranged overdraft. Start by exploring our current account range and how you could switch to NatWest.

Account eligibility and criteria apply.

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Step-by-step guide to applying online

Helping you stay in control of your spending

Mobile banking app

Our mobile banking app helps you keep track of your spending on the go. Keep an eye on money coming in and out of your account.

App criteria apply.

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Free text alerts

You can set up free text alerts and get notifications when your balance goes above or below a certain limit. We can also let you know if you're about to slip into an unarranged overdraft.

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Overdraft, credit card or loan?

If you're unsure which type of borrowing to use, we'll walk you through your options to help you decide what's right for you.

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Something else we can help you with?