Understanding your student overdraft

Whether you’re paying rent for your student digs or need to purchase some extra uni supplies, your student overdraft can provide a helping hand if you’re low on funds. But before you start spending, it’s important to get to grips with everything your student overdraft entails. 

How much can you borrow on your student overdraft?

The amount you’ll be able to borrow will depend on who you bank with and your financial circumstances.  Some lenders may let you have up to £3,000 on your student overdraft, while others may set their limit lower.1 If you’re unsure about your student overdraft limit, contact your bank. 

Can you increase your student overdraft?

You may be able to extend your student overdraft limit after a certain period of time. This will depend on your lender and they may take into account things like the way you’ve used the account. 

Should you increase your student overdraft?

The important thing to remember when it comes to your student overdraft is that you will need to pay everything you borrow back. If you need the extra funds and you’re comfortable you’ll be able to repay, then increasing your overdraft can be helpful.

Keep in mind that when you’re no longer a student you may incur interest if you still owe money on your overdraft and extending your overdraft limit if you don’t need it may just increase the temptation to spend.

How do you know if you're nearing the limit of your overdraft?

To make sure you’re not overspending on your overdraft, you’ll need to be aware of your incomings and outgoings. There are apps which can help you monitor this. Check if your lender offers text alerts that send you a message if your balance drops below a certain point.

What should you do if your degree is longer than three years?

Make sure that your bank knows when you’re graduating, particularly if you’ve extended your time studying through a change of course or by repeating a year. If you don’t, your student account may be changed to a graduate account and you may be charged interest. 

What happens when you're finishing your degree?

If your degree is coming to an end, you may want to look at switching your student account. Some graduate accounts charge 0% interest on overdrafts for a fixed period of time, but always check this before you switch. 

If you’re wanting to close your student account, you’ll need to have paid back your student overdraft before you’re able to.

What next?

You may want to look at building up your savings before you head off to uni, to help you stay out of the red. And once you’re there, creating a budget and planning your expenses can help you stay on top of your cash flow as well as make repayments on an overdraft. 


This article provides general information and does not take into account the financial situation of the reader. For this reason it must not be relied on as financial advice. All accounts are subject to terms and conditions.