Personal Overdrafts

Rates and Fees verified correct on October 26th, 2016

Say goodbye to overdrawn account fees and have a convenient line of credit attached to your transaction account.

A personal overdraft is a line of credit that you can add to an everyday transaction account. It allows you access to extra money, based on an agreed upon limit.

An overdraft can be a convenient option if your account occasionally slips into the red or if you're after a line of credit to use as and when you need it. Find out how these accounts work in our guide below.

Personal overdrafts you can apply for

How does a personal overdraft work?

Personal overdrafts are a type of credit attached to an everyday transaction account. You will be approved for a set limit and be able to draw up to and including that limit whenever you need it. Your overdraft funds will only be accessed when the other funds in your account have been exhausted.

You may have to pay a fee to set up your overdraft but you will pay any interest on your total balance – you will only pay interest on the amount you use. Once you put money back into your account you will be able to use the more credit.

How you can compare overdraft accounts

As with any financial choice you make, you should compare personal overdrafts in order to get the best deal possible. You’ll also want to pick the best loan for your personal financial situation.

  • Fees and charges.
    Fees to look out for include upfront fees such as establishment fees and ongoing fees in the form of monthly or annual fees. Compare your options to find the personal overdraft with the least fees attached to it.
  • Interest rates.
    Since a personal overdraft is an unsecured loan, variable interest rates generally apply. Most banks only ask that you pay interest on the money you use, but you’ll still want to find the best interest rate available.
  • Minimum requirements.
    Some lenders may set a minimum requirement for how much your personal overdraft loan should be. Compare your options so you don't take out a higher credit limit than you need.
  • Application process.
    If you’re the type of person that is looking for a simple enrolment process you’ll want to examine all of your options to find the simplest one for you.

Weigh up the benefits before you apply

  • You can avoid overdrawn account fees. If you find your account dipping into the red too often, an overdraft account will safeguard you against overdrawn account fees (up to your overdraft credit limit).
  • 24-hour access. With most personal overdrafts you'll have 24-hour access to your account, and most providers will give you a debit card for convenient spending and ATM withdrawals
  • You only pay for what you use. You’re only charged interest for what you’re using, helping you to save.
  • The account comes with interest. Like any unsecured loan, personal overdrafts come with interest rates. These rates will vary from lender to lender so it’s important to compare your options to get the best deal.
  • Fees and charges can vary. There are also fees and charges attached to personal overdrafts. This can be anything from enrolment fees to account-keeping fees.

Things to avoid about personal overdrafts

  • Overusing the account. Sometimes people overuse their personal overdrafts just because it is conveniently attached to their transaction account. If you apply for and get a personal overdraft you should make sure you use it only when it’s necessary. Most personal overdrafts only charge interest on the money you use so, so if you make sure to only use what you need you can save yourself interest payments.
  • Taking the first loan you see. Make sure to compare personal overdrafts based on the applied fees and charges, the interest rates, and any requirements in order to get the best deal that suits your personal situation.

How you can apply for a personal overdraft

Once you compare the personal overdrafts available you can start the application process. Each bank or lender will have their own application process and eligibility criteria.

Generally, to open a personal overdraft you must be an Australian citizen or permanent resident with a valid Australian address. You must also be 18 or older and pass a credit evaluation to determine if you can afford the loan. That means the lender may require information regarding your employment and income as well as personal assets.

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4 Responses to Personal Overdrafts

  1. Default Gravatar
    Sandra | September 16, 2016

    I’m on a Centerlink disability pension, can I apply for a bendigo bank overdraft of 500.00 please,

    • Staff
      Elizabeth | September 20, 2016

      Hi Sandra,

      Bendigo Bank accept Centrelink benefits as income so you can consider applying for an overdraft through them. Your income and financial situation will be taken into account when they’re approving the overdraft.

      Hope this helps,


  2. Default Gravatar
    renee | September 8, 2016

    i dont have enough $$ available for a redraw on my personal loan, if i transfer the difference from my complete freedom account to my personal loan will i be able to redraw then?

    • Staff
      Elizabeth | September 8, 2016

      Hi Renee,

      As long as you make some sort of additional repayment to your personal loan you will be able to redraw that amount (providing your personal loan offers this).

      Hope this helps,


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