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A fairer overdraft
We all need a little extra support from time to time. At Starling, we know that an overdraft can act like a short-term safety net when you’re feeling the burn financially.
But we want to make banking better – which means offering a better kind of overdraft as a part of your current account. One that’s flexible and easy to manage, with modern tools and reasonable rates. An overdraft that puts you in control.
How our overdraft is different
Overdrafts with Starling are simple: they’re approved to a certain limit from the moment you open your account. Accept with just a tap.
Manage the amount you need within that limit by adjusting the slider within the app.
No unfair unarranged overdraft charges — you’ll only pay interest for the amount you borrow.
Simple and straightforward pricing: interest is charged at 15% EAR*.
Back in the black? Close your overdraft any time, in app.
When you open an account with Starling, you may be offered an overdraft subject to a full check about you with a Credit Reference Agency – which is in place just to make sure we offer you an overdraft that’s both affordable and manageable for your current situation. Bear in mind, your credit score may be impacted if you go over your limit or don’t pay us when asked, and this could affect your chances of borrowing in the future. We’ll let know if your overdraft limit is going to be reduced or cancelled (which could happen at any time), or if you need to repay amounts used.
About Interest Charges
If you do have an overdraft with us, we charge interest at 15% EAR*. This is the actual rate you’ll pay, although we may update rates from time to time (but we’ll always let you know beforehand, so you can decide whether to keep it or not). Interest is accrued daily, charged on the 15th of the following month and updated clearly in your app.
*Not that kind of EAR
An EAR (Equivalent Annual Rate) is a common way of showing interest rates on overdrafts which you can use to compare different banks’ interest rates. This does not include fees that some banks may charge you in addition to interest. Starling does not charge additional fees.
We want our overdraft to feel like a source of reassurance and support in your everyday life, rather than something that further contributes to financial pressures – so we’ve taken steps to make sure that you’ll never spiral out of control.
Payments that would take you over your overdraft limit will, in most cases, be stopped before they can go through. However, in the rare instances where you do go into an unarranged overdraft by accident — and let’s face it, it happens — we’ll only ever charge you the standard rate of interest, with a maximum monthly charge of £2. That’s less than the price of your daily coffee.
Additionally, if your total overdraft interest charges are less than 10p at the end of any given month, it’s on us – we’ll waive your interest charge for that month.
Monthly Maximum Charge (correct as of 1 June 2018)
Banks may charge different maximum monthly charges for an unarranged overdraft, which may help you to decide which bank is right for you. However, you’ll find that while rates are different, the explanation below is the same across the board:
Your current account will set a monthly maximum charge for:
a) Going overdrawn when you haven’t arranged an overdraft.
b) Going over/past your arranged overdraft limit (if you have one).
This cap covers:
a) Interest and fees for going over or past your arranged overdraft limit.
b) Fees for each payment your bank allows despite lack of funds.
c) Fees for each payment your bank refuses due to a lack of funds.
d) Starling will only charge interest – not fees – meaning our monthly maximum charge is lower.
Here’s just a few of the ways we help you stay in control of your spending:
We’ll send real-time notifications when your balance falls below £25, or when you’re about to go into your overdraft, as well as when you’re using it.
Spending Insights giving you both a breakdown and overview of your spending habits so you can see where there might be room for improvement.
Keep track of your spending with The Pulse and real-time notifications.
Adjust your overdraft limit with your overdraft slider in app.
You’ll also be able to use the app to see how many days you’ve been in your overdraft, and how much interest you’ve accrued.
Struggling to pay off your overdraft?
You’re not on your own. Starling’s budgeting tools are designed to make money management easier, but if you’re still struggling, we’re on hand 24/7. Contact customer support in app via Live Chat, message us on the website chat function or give our friendly team a call. Free debt counselling, debt adjusting and providing of credit information services is also available from the Money Advice Service – find out more by visiting the Money Advice Service website.