How To Get An Overdraft

Learn all about overdrafts, how to get one even if you have bad credit and other possible alter-natives to keep you covered until payday.

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What is an overdraft?

Simply speaking, an overdraft is where you spend more money that is available in your bank account, which results in a negative balance. They allow you to borrow money temporarily to an agreed amount by your bank. Overdrafts can be a useful facility to have, particularly at the end of the month, if you don’t have quite enough to cover you until payday.

However, many people forget that overdrafts are actually a form of credit, and one that can become rather expensive.

Types of overdrafts

There are two types of overdrafts available: an arranged overdraft, and an unauthorised overdraft. With an arranged overdraft, you agree in advance with your bank how much you’re able to go overdrawn by should you need to.

With an unauthorised overdraft, there’s no prior agreement in place and the bank will decide whether to allow your balance to drop below zero, and how much by, on a case by case basis. If you use an unauthorised overdraft, you could be hit with some costly fees.

To use any type of overdraft, you must have a standard current account with your bank. These usually come with an agreed overdraft limit, unless you’ve previously declined the option. This limit can vary greatly and the amount you will be offered is usually dependent on your credit history.

They also come with the facility to enter an unauthorised overdraft, in case you have no arranged overdraft set up or if you exceed the overdraft limit you already have.

Unauthorised overdrafts, though, come with fees and charges that are worth considering before you choose to borrow this way. For example, if you go overdrawn on your account by even a small amount and it’s an unauthorised overdraft, you could be charged a daily fee for each day you remain overdrawn, plus a paid transaction fee and interest – all fees that don’t typically come with arranged overdraft limits.

It is because it can be more cost effective than if you need access to an overdraft, you should agree an arranged overdraft with your bank. However, if you have bad credit this can prove difficult.

Overdraft Eligibility Checker

Getting an overdraft is easy, start by choosing a bank where you want to open an account, or one that you already have an account open. Make sure that the bank you have chosen has the option to take out on overdraft and any overdraft protection available. While most banks have their own eligibility criteria, here’s what you should know about getting an overdraft:

  • You should be over 18 and live in the UK
  • A soft search will be done to look at your financial situation
  • Your ability to be accepted for an overdraft will depend on your credit score
  • If you’re eligible, the amount depends on the credit check results

But of course, your ability to get an overdraft depends on the bank and is a combination of of your credit score and details you give. If you have bad credit, don’t worry as there are ways you can get an overdraft for bad credit, or there are overdraft alternatives.

How to get an overdraft with bad credit

There are a few ways to improve your chances of being accepted for an account with an overdraft with bad credit.

Speak to the bank or building society first

Before you take any other step, it’s a good idea to speak to a bank about taking out an overdraft first. Even if you know you have poor credit, you could still be accepted for an overdraft with bad credit.

Whether this is finding out your chances of being accepted for a new account, or adding an arranged overdraft to a current account, they can perform a soft search called an overdraft eligibility checker. This allows them to tell you how likely you will be accepted for one without harming your score.

Opt for a smaller overdraft limit

If you’re trying to get an overdraft with bad credit, it’s a good idea to only apply for the amount you need. If you apply for large overdraft limits with bad credit, it’s unlikely you’ll be accepted. Instead, try small overdrafts and keep within it, this can demonstrate that you can clear it each month and build trust for arranging larger limits later.

Remember, loyalty doesn’t always work in your favour

You may have been with your bank for years, but this doesn’t guarantee they’ll accept your request for a standard current account or adding an overdraft to your account, especially if you have bad credit. If you’re trying to get an overdraft, try to shop around or open new accounts with another bank.

Shop around

Whether you can’t get an overdraft with your current bank account or not, it’s always a good idea to shop around for the best offers, deals and overdraft benefits that each bank has. This way you can know whether your bank is the best option or if creating a checking account with another bank is better for getting an overdraft. has a good comparison service, featuring the best current accounts available for those with bad credit.

Improve your credit rating

Regardless of whether you can get an overdraft for bad credit, it’s always a good idea to improve your credit score. If you’re unable to get an overdraft, this can help improve your chances of being accepted. If you can get one, repairing your credit history can reduce your chances of being declined in the future, can also make it easier to extend your overdraft and accesses different credit products if needed.

There are a few ways that you can improve your score, including:

  • Register to vote
  • Ensure you’re paying off bills on time
  • Try to pay off larger debts first
  • Close any unused accounts
  • Don’t apply for a lot of credit at once

For more, check out our guide on How To Improve Your Credit Score.

What if I can’t get an overdraft?

If you are refused an agreed overdraft, you can still open a basic bank account if you don’t have one already. This just means that you have to watch your balance as if you go into an unauthorised overdraft there will often be a fee to pay for going into your overdraft without an agreement.

The bank you have applied with will likely tell you why you aren’t eligible for an agreed one, but it may be because you have a low credit score, or don’t have enough money to cover an overdraft or any interest or fees that may come along with it.

Both of these can affect your ability to get an overdraft as with any credit it can make you an unreliable borrower and you may struggle. If you aren’t entitled to an overdraft, try to apply for smaller amounts and increase your credit score. Take a look at our in-depth guide on how to fix bad credit for more.  If you’ve done this and still can’t get one, there are overdraft alternatives that you can try.

Overdraft loans & alternatives

If you are struggling to get an agreed overdraft, or have entered into a negative balance of a unauthorised one,  there are other ways that can keep you going until payday. Called overdraft loans, it’s a line of credit in which you can borrow what you need over a period of time and pay it back like any other loan. Whether you need an overdraft alternative to pay unexpected bills, or a loan to pay back what fees and interest you owe your bank.

Here at Sunny we have overdraft alternatives, from as little as £100 to as large as £5,000 and you can choose from 3-36 month repayment periods. Just note that when taking out an overdraft loan, you will get a soft credit check to see how likely you will be accepted followed by a hard credit search. If you are denied, try to borrow smaller amounts. Just note, that the amount you can borrow and any interest rates depend on your credit score.

Apply for an overdraft loan online

If you’re looking at an overdraft alternative such as a loan, you can apply online through Sunny and borrow the amount that you need. Choose the amount and repayment period and find the right loan for you. With instant decisions, no fees, and easy to manage repayments you could have your overdraft loan in your account the same day you get accepted.


Representative 89% APR

Representative Example: Borrowing: £1000 for 18 months, Total Repayable: £1853.43, Total Interest: £853.43, Interest Rate (Variable): 89.9%. Rates between 9.3% APR and 1721% APR – your no-obligation quote and APR will be based on your personal circumstances. Loan term lengths from 3 to 36 months. Subject to lender’s requirements and approval.

Sunny Loans is a registered trading name of Upward Finance Limited, who is an introducer appointed representative of Flux Funding Limited, who is a credit broker, not a lender. Loan repayment terms are 3-36 month loans.

Warning: Late repayment can cause you serious money problems. For help, go to

Looking for further information on lending options?

Want to know more about borrowing for different circumstances with bad credit? Take a look at our guides below.

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