Janice Lozano
NatWest's student account is one of the most popular in the UK, largely due to its sign-up perks. The account offers an interest-free arranged overdraft of up to £3,250, with no funding requirements. While there is no set payback date, it is considered a form of debt and is repayable on demand. The overdraft limit and interest-free amount decrease each year after graduation. This article will explore the NatWest student account in more detail and provide information on how long students typically have to pay off their overdrafts.
| Characteristics | Values |
|---|---|
| Arranged overdraft payback date | None |
| Interest charged | Yes, if the maximum overdraft limit is exceeded |
| Interest charged on student accounts | No |
| Maximum overdraft limit | £3,250 |
| Minimum overdraft limit | £250 |
| Overdraft reduction | £1,000 per year |
| Graduate account duration | 3 years |
| Interest-free period for graduate accounts | 2 years |
| Interest-free overdraft limit for students | £500 in the first term, up to £2,000 in the second term of the first year |
| Interest-free overdraft limit for graduates | Up to £3,250 in the first year, up to £2,250 in the second year, up to £1,250 in the third year |
| Overdraft repayment time | By 2:00 PM on the same day to avoid charges |
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What You'll Learn
Arranged and unarranged overdrafts
NatWest offers two types of overdrafts: arranged and unarranged. Both types of overdrafts will cost you money in interest when you use them. An arranged overdraft is when NatWest agrees to a limit that lets you spend more money than you have in your current account. This can be useful for managing your money if you need to cover short-term expenses or unexpected bills. It is a form of debt and is repayable on demand. You will not be charged if you do not use your arranged overdraft. You can apply for an arranged overdraft of up to £3,250, which is interest-free for the first year after graduation. The amount that is interest-free decreases each year after graduation.
An unarranged overdraft occurs when you spend more money than you have in your account without having an arranged overdraft in place, or when you exceed your existing overdraft limit. NatWest will charge interest on unarranged overdrafts, and the monthly cap on unarranged overdraft charges for standard adult current accounts is £18.80-£19.40. Unarranged overdrafts need to be paid off immediately. You can pay off an overdraft at any time by ensuring you have a positive balance in your account.
NatWest offers a text alert service to notify you when you start to use an arranged or unarranged overdraft. They will also send unarranged overdraft "Act Now Alerts" to let you know if you are about to go into an unarranged overdraft so that you can take action to avoid charges.
Student Overdrafts
NatWest offers interest-free student overdrafts with a limit of £500 for the first term of the first year. Students can apply to increase the overdraft limit up to £2,000 from the second term of the first year, and up to £3,250 from the second year onwards. It is important to note that student overdrafts are a form of debt and can impact your credit score. While student accounts typically do not incur interest on their overdrafts, it is important to check the terms of your account.
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Interest and fees
NatWest's student account offers an interest-free arranged overdraft of up to £3,250. The specific limit depends on what year of study you are in. In the first term of the first year, the limit is £500, which can be increased to £2,000 in the second term. From the second year onwards, students can apply for an overdraft of up to £3,250.
The interest-free overdraft is a significant benefit of the NatWest student account, as it allows students to borrow money without paying any interest or fees, as long as they stay within their arranged overdraft limit. However, it is important to note that an overdraft is considered a form of debt and is repayable on demand. Therefore, students should ensure they have enough money in their current account or a suitable overdraft limit before any payments are due.
After graduation, the NatWest graduate account offers an interest-free arranged overdraft for up to two years. In the first year after graduation, the entire overdraft of up to £3,250 is interest-free. In the second year, the interest-free amount decreases to £2,250, and in the third year, it further decreases to £1,250.
NatWest also offers a cost checker tool that allows students and graduates to see how much interest they are likely to pay based on their borrowing amount and frequency. This tool can be useful for planning and managing finances.
It is worth noting that while student accounts typically don't incur interest on their overdrafts, unarranged overdrafts can result in charges. An unarranged overdraft occurs when you spend more money than you have in your account without an arranged overdraft in place. In such cases, it is recommended to pay funds into your account as soon as possible to avoid additional charges.
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Credit score impact
A NatWest student overdraft is a form of debt and is repayable on demand. It can impact your credit score if your account remains inside the overdraft limit for long periods and you don't pay it back. However, if you pay off your overdraft regularly, it could help improve your credit rating.
When you apply for an overdraft or an increase to your existing overdraft, NatWest carries out a credit check which is recorded on your credit file and could have an impact. This check will be recorded on your credit file but will not impact your credit score.
If you're unable to repay what is owed, your credit score could be impacted. Most lenders will use your credit score when deciding what to lend to you.
NatWest offers a graduate account for up to two years after graduation, retaining access to an interest-free arranged overdraft. This can be helpful as you transition out of university and into adult life. Your eligibility for things like an interest-free arranged overdraft is influenced by your credit score.
NatWest's student account is one of the most popular, possibly due to its sign-up perks. It offers an interest-free arranged overdraft account, which is fundamental to any good student account. You can increase your overdraft limit to £2,000 by your second term in your first year, but only £500 is available in your first term.
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Overdraft limit
NatWest's student account is one of the most popular in the UK, and for good reason. It offers an interest-free arranged overdraft facility, which is a fundamental element of any good student account. This overdraft limit can be increased over time, up to a maximum of £3,250.
When you first open your account, your interest-free overdraft limit will be £500 for the first term of your first year. From the second term onwards, you can increase this to £2,000. If you are in your third year or beyond, you can apply for an overdraft of up to £3,250.
After you graduate, your student account will become a graduate account. This will still be interest-free for the first year, with a limit of £3,250. In the second year, the limit drops to £2,250, and in the third year, it is £1,250. After this, any arranged overdraft will incur fees and charges.
It is important to note that an arranged overdraft is a form of debt and is repayable on demand. You should always ensure that you have enough money in your account or a suitable overdraft limit in place before any payments are due. Unarranged overdrafts, where you spend more than you have in your account without an arranged overdraft in place, will incur charges and need to be paid off immediately.
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Repayment recommendations
NatWest's student account offers an interest-free arranged overdraft, which is a common feature of student accounts. This overdraft limit can be increased annually, up to a maximum of £3,250. It is important to note that this overdraft is a form of debt and is repayable on demand. Therefore, it is recommended to always ensure that there are sufficient funds in your current account or an appropriate overdraft limit in place before any payments are due.
Arranged overdrafts typically do not have a payback date, but if they incur interest, it is important to address this promptly to avoid unarranged overdraft charges. Student accounts generally do not charge interest on their overdrafts, but it is crucial to confirm this with your bank.
Upon graduation, your student account will be converted into a graduate account, and the terms of your overdraft will change. For the first year, up to £3,250 will remain interest-free. In the second year, the interest-free limit decreases to £2,250, and in the third year, it further reduces to £1,250.
To avoid charges, it is recommended to pay funds into your account by 2:00 pm on the same day if you have exceeded your agreed overdraft limit. If you became overdrawn before the current day, it is advisable to deposit funds as soon as possible to minimise potential charges.
NatWest provides a text alert service to notify you when you start using your arranged overdraft or are about to use it due to a scheduled payment. This service can help you manage your finances and promptly address any overdraft situations.
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Frequently asked questions
There is no payback date for an arranged overdraft, but it is considered a form of debt and is repayable on demand. If you have an unarranged overdraft, you will need to pay it off immediately.
An arranged overdraft is when you have an agreed limit with NatWest that you can go overdrawn up to. An unarranged overdraft is when you spend more money than you have in your account without having an arranged overdraft in place.
NatWest's student account offers an interest-free arranged overdraft. However, if you go over the agreed limit, you will be charged interest.
