An overdraft is when you spend more money than you have in your account. Lloyds Bank, like other banks, charges fees for using an overdraft. These charges can vary depending on the type of overdraft you have and how much you overspend.
Types of Overdrafts and Charges
Arranged Overdraft
An arranged overdraft is an agreed limit with your bank on how much you can overspend. You'll receive a set overdraft limit and pay a monthly fee for having access to it. Lloyds charges a monthly fee for arranged overdrafts.
Unarranged Overdraft
An unarranged overdraft is when you spend more money than you have in your account without an agreed limit. These are typically more expensive than arranged overdrafts. Lloyds charges a fee per day for unarranged overdrafts.
Other Overdraft Charges
Overdraft Interest
Lloyds charges interest on both arranged and unarranged overdrafts. This interest is calculated daily and added to your account balance.
Transaction Fees
There may be additional charges for using your debit card or making payments while in an overdraft.
How to Avoid Overdraft Charges
- Track your spending: Keep a close eye on your account balance and ensure you don't overspend.
- Use budgeting tools: Utilize budgeting apps or spreadsheets to help manage your finances.
- Consider an arranged overdraft: An arranged overdraft can be a cheaper option than unarranged overdrafts.
- Pay off your overdraft as soon as possible: The longer you remain in an overdraft, the more interest and charges you'll accumulate.
Contact Lloyds Bank
If you have any questions about overdraft charges, contact Lloyds Bank directly. They can provide you with specific information on their current fees and charges.