Types of overdraft
An overdraft is often referred to as an 'arranged overdraft' or an 'unarranged overdraft'.
- An ‘arranged overdraft’ is a credit facility, that enables you to transact from your linked current account even when your account balance goes below zero. An arranged overdraft has an agreed limit, approved by Handelsbanken in advance.
- An ‘unarranged overdraft’ occurs when you either exceed your arranged overdraft limit, or you continue to transact on your current account after your balance goes below zero, without having a pre-approved arranged overdraft. Continuing to transact on your account without a pre-arranged overdraft, or that exceeds your approved credit limit, may result in payments not being made.
It is important to remember that both types of overdraft have interest charges and additional fees that may apply. In general, ongoing and excessive use of an overdraft facility may have an impact on your credit file.