Managing your overdraft

Overdrafts are for short-term borrowing
Arranged overdrafts are designed for short-term borrowing, ideal if you need to borrow a little extra money to tide you over now and then. Or when your balance is low and you don’t want a payment to bounce before you can add money to your account.

But you shouldn’t use them over the long term as the cost of borrowing is typically higher than things like loans which are designed for the long-term. The sooner you repay your overdraft the less interest you’ll pay.

We may ask you to repay some of your overdraft if you don’t regularly add money
As a responsible lender, we’ll review your overdraft borrowing to make sure you’re using your overdraft for short-term borrowing. If you’re using your overdraft, but don't add any money to your account for over 60 days, this means it’s not short-term borrowing and we might ask you to make a payment into the account.

This is part of being a responsible lender, and making sure you aren’t taking on more debt than you can manage.

If we ask you to make a payment it’ll be 5% of your overdraft balance at a minimum amount of £10. We’ll always let you know how much money you’ll need to add and by when, giving you at least 30 days’ notice to make a payment. That amount won’t change in the time period we set out.

Please bear in mind that, in-line with your overdraft agreement, we may reduce or remove your overdraft limit and may also ask you to repay the full amount you owe, although we’ll usually give you 30 days’ notice.

If you’ve told us that you can’t add money to your account, you’re having financial difficulties or are on a plan with us, we may still need you to add money after 125 days of being in your overdraft without making a deposit.

Here’s an example:
You’ve been in your overdraft without adding any money to your account for more than 60 days and your balance is -£500 we may ask you to add £25 (5% of £500) to your account. If you don’t add £25 to your account within 30 days or talk to us about your situation, we may have to reduce your overdraft limit to your overdrawn balance.

If you’re ever struggling to make a payment or if making a payment would cause you financial difficulty, the most important thing to do is to talk to us so we can try to help.

You can manage your arranged overdraft in the app 💁‍♂️

Tap the Home icon in the menu bar
Tap the Account & Overdraft button under your Monzo card (if you can't find this button, swipe down on your list of payments)
Tap Manage overdraft

If you'd like to find out if we can help with managing your arranged overdraft, please get in touch through the Monzo app:

Tap the Help icon in the menu bar
Search for Managing your arranged overdraft
Tap chat to us at the bottom of the article