Graduate Blog

Everything you need to know about… Graduate Overdrafts


You’ve enjoyed a handsome, interest-free overdraft for a while now and it’s done you a world of wonders, but what about when it’s taken away? Cue dramatic theatrical music!

Okay, it’s not really that bad. Your bank will upgrade you to a very respectable-sounding ‘Graduate Account’ and will notify you of the terms of your overdraft. It’s likely that you’ll be given a fair amount of time to pay your overdraft back, which will usually result in one of two things.

–          Either your bank will allow you to pay your overdraft back by introducing a small amount of interest after a while, increasing the interest in increments until it is paid off.


–          Your bank will reduce the size of your interest-free overdraft, again in increments, as time goes along, until it is fully paid off.

Pretty much the exact same thing – what’s important is that you know exactly how much you need to have paid off by certain times and how much interest you will have to pay back.

Banks are also quite understanding, regardless of what tabloid papers would have you believe. If your situation dictates that you can pay your overdraft off early, then that can quite obviously be sorted. Conversely, if you’re struggling with the repayments of your overdraft, going travelling or any such-like – it’s worth speaking to your bank and seeing what they can do. Here are the four major student and graduate bank account hosts and what they provide:

NATWEST:  £2,000 for the first 3 years after graduation:

Year 1- Completely interest-free.

Year 2 – £1,000 of the £2,000 overdraft is interest-free.

Year 3 – £500 of the £2,000 overdraft is interest-free.

LLOYDS: Beginning with a maximum of £2,000 overdraft as a student:

Year 1 – £2,000 overdraft is interest-free

Year 2 – £1,500 overdraft is interest-free

Year 3 – £1,000 overdraft is interest-free

HSBC: Beginning with a maximum of £1,500 overdraft is interest-free:

Year 1 – £1,500 overdraft is interest-free

Year 2 – £1,000 overdraft is interest-free

BARCLAYS: Overdraft incurs a £7 per month charge, but includes freebies such as mobile insurance:

Year 1 – £3,000 overdraft – bank lowers the ‘interest-tiers’ in the subsequent years.

As with everything guys, this sort of information is subject to change, so it is worth having a look about on the banks’ websites or making an appointment to speak to someone there!

About the Author

Jade A Jade A

I am currently working as a marketing intern for and I have recently graduated from the University of York with a degree in English Language and Linguistics. However, my real passion at university was writing, and particularly writing for blogs. I began a blog myself over a year ago, switching between fashion and beauty, to my university experiences and I have been hooked ever since. Blog writing opened me up to the world of social media and blogging communities that I quickly became a part of, and since then I have been fascinated by the use of blogging and social media for marketing and PR. Working as a marketing intern at is giving me the opportunity to experience marketing and PR first-hand and I enjoy every opportunity I get. It’s really opening my eyes to the prospect of a career in marketing and PR and I hope to continue gaining valuable experience in this area and hopefully a future permanent post in the industry will follow!

Have your say...