The student overdraft
Lesson 4 of 12 in our free Borrowing guide: a 5-minute money game with the key points below.
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Questions you'll answer
Mo's interest-free limit is £1,500. Mo's balance is −£900. How much interest-free buffer is left?
Mo graduates with −£1,200 on the overdraft. What's the smartest plan?
Quick facts
- Myth: “Student overdrafts stay interest-free forever.” — After graduation they usually convert to a graduate account, with the interest-free limit shrinking over time — then interest applies.
- Fact: “Your overdraft balance shows up on your credit file.” — It's credit, so it's reported. Staying within your limit helps keep it clean.
- Fact: “Seeing −£900 in your app is just as real as owing someone £900.” — Because it IS owing someone £900. The minus sign is easy to ignore — don't.