How to get out of your overdraft

An overdraft can be a useful tool when you face unexpected costs, but if you find yourself relying on it too frequently, or using it to cover day-to-day expenses, this could be a warning sign for your financial health.

If you're struggling to pay off your overdraft, here are some things that could help:

• create a budget
• see if you can reduce how much you’re spending
• set yourself a repayment plan
• look at ways you might be able to reduce your overdraft limit
• look at different borrowing options
• talk to us

Remember, if you are making frequent use of your overdraft, you are likely to be incurring higher avoidable costs. 

A budget can help you see what money you have coming in and where you’re spending it.

Make sure to factor in all the money coming into your household – including salaries and any benefits you may get. Be honest with where you’re spending it too.

Remember to include any existing debts you may have.

While it can feel daunting, it’s important to know where the money you have coming in is going.

Use your budget to see if there are any areas where you can make changes or cut back. Split your spending up into ‘needs’ and ‘wants’.

Your ‘needs’ are the essentials like your rent or mortgage, bills, and groceries, while your ‘wants’ could be those extra things, like a new pair of trainers.

Start by reviewing your wants and making some sensible choices on places where you can cut back on your spending. It may be a little painful, but it'll be worth it in the long run! 

Look at your Direct Debits and standing orders to see if you’re paying for anything you no longer use, like subscription services. Try comparison sites to see if you can bring your bills down, too.

Overdrafts can be tough to repay as they don’t have a set repayment date, unlike credit cards and loans.

Try treating it like any other bill. Set a monthly target for how much you want to pay off and go from there. Factor this into your budget too, so the money is accounted for.

If you’re able to chip away at your overdraft, consider reducing your limit as you go. It could help you to achieve your goal and avoid increasing your overdraft balance again. 

If your overdraft is with first direct, you can ask us to reduce or remove your overdraft at any time by calling us on 03 456 100 100.

If you don’t think you’ll be able to pay off your overdraft in the short term, you may want to think about other ways to repay it, like a personal loan. This could help you to consolidate any additional debts and create a more structured repayment plan. 

Make sure to check the APR of the personal loan and compare it to the interest you’re paying on your overdraft to see if this is the best option for you. 

If you feel like your overdraft is unmanageable, talk to a trusted family member or friend – they may be able to help reduce any stress you’re feeling.

Professional advice is also available from organisations including 

Citizens Advice Opens an overlay [Will show a security message first], National Debtline Opens an overlay [Will show a security message first] and the StepChange Debt Charity Opens an overlay [Will show a security message first].

If you are struggling to get out of your first direct overdraft, please call 03 456 100 188 to speak to a member of our Financial Support team. They may be able to help.

You can also visit our money worries page to learn more about how we can support you.