From August, some lucky people could save on overdraft charges BUT… you could end up paying nearly 40%!
This is because most banks are about to increase the interest rate charged for overdrafts to nearly 40% APR!
Read up on what’s behind this move here, or just watch the BBC video below.
Although some will be better off with these changes, as the regulator (the FCA) says “People who are likely to pay more for an overdraft are those borrowing larger amounts for longer periods of time, who should consider alternatives to borrow more cheaply.”
Luckily there is an easier way to save on overdraft charges…
An overdraft with the bank at 39.9% APR is like having a constant debt of £1000 and will cost you £399 in interest per year.
On the other hand, if you were to take out a loan with us for £1000 at 14.9% APR over the year, you’d save £322.72*
*based on us charging £77.28 interest compared to around £400 at the bank
The slider below illustrates the saving you’d make by taking out a loan with us compared to the cost of having the same amount as an overdraft at the bank. In all cases we assume you’d carry the debt / overdraft for 12 months.
Click here to learn more about our personal loans.