An arranged overdraft is where we agree an overdraft limit with you in advance. You’ll then be able to borrow up to that limit. You can apply for this kind of overdraft when opening your account, or at any time later.
An unarranged overdraft is when your account goes overdrawn and you don’t have an arranged overdraft, or you go over your arranged limit. Using an unarranged overdraft can have a negative impact on your credit rating. We may also decline payments that would involve using an unarranged overdraft. However, in most cases we will try to make your essential payments even if you don’t have enough money in your account.
With both types of overdraft, you'll usually have to pay interest on what you borrow (above any interest free amount that applies to your account).