How Long Do You Have to Pay an Overdraft Back?

How Long Do You Have to Pay an Overdraft Back?

There is no single legal deadline that applies to all overdrafts in the UK. How long someone has to pay an overdraft back depends entirely on the terms the bank set when the overdraft was opened — and banks have the right to demand repayment with relatively short notice, sometimes as little as 30 days. The good news is that most banks are required by the Financial Conduct Authority (FCA) to treat customers in financial difficulty fairly, which means options usually exist before things escalate.

The sections below explain how overdraft repayment timelines actually work in practice, what happens when a bank withdraws an overdraft facility, and what formal routes exist if the balance cannot be repaid quickly.

What the Bank's Terms Actually Say

An overdraft is a form of credit attached to a current account. It is not a fixed-term loan — it is a revolving facility that a bank can reduce or withdraw, subject to giving reasonable notice. Most high-street banks state in their terms and conditions that they can demand repayment of an unauthorised or overdrawn balance within a set period, commonly 30 days, though some allow longer and a small number allow less.

Authorised (agreed) overdrafts tend to carry more protection in practice. If a bank wants to withdraw an authorised overdraft, it typically writes to the account holder first. In contrast, unauthorised overdraft balances — amounts spent beyond an agreed limit or without any agreed facility — can attract different treatment and the bank's tolerance for those balances is often shorter.

When Does a Bank Demand Full Repayment?

A bank is most likely to demand full overdraft repayment in one of three situations: the account holder has persistently used the overdraft without reducing it, the overdraft has gone beyond an agreed limit, or the account is being closed. In these circumstances, the bank will usually issue a formal demand letter or notice.

That notice period varies by provider, but 30 days is a common figure quoted in retail banking terms. Some banks offer a longer runway — 60 or 90 days — particularly for authorised facilities where the customer has a good history. The key point is that the timeline is set by contract, not by statute, so checking the specific account's terms and conditions is the only way to know the exact figure that applies to a given situation.

What Counts as Reasonable Notice?

The FCA's Consumer Credit sourcebook (CONC) and the Consumer Duty rules require firms to act in customers' best interests and to give adequate notice before withdrawing credit. While there is no single prescribed number of days written into law for overdraft repayment demands, regulators expect banks to act reasonably. Giving a customer 24 hours to repay a four-figure overdraft balance would generally not be considered reasonable treatment.

If someone believes they have been given inadequate notice or have not been treated fairly, they have the right to raise a formal complaint with the bank and, if unresolved within eight weeks, to refer that complaint to the Financial Ombudsman Service.

What Happens If the Overdraft Cannot Be Repaid in Time?

When someone cannot repay an overdraft within the period the bank has given, the debt does not simply disappear. The bank will typically pass the account to its internal arrears or collections team. If that does not result in repayment, the debt may be sold to a third-party debt collection agency or the bank may pursue a County Court Judgment (CCJ).

A CCJ, if obtained, stays on the Register of Judgments, Orders and Fines for six years unless paid in full within one calendar month of the judgment date. That can significantly affect a person's ability to obtain credit, a mortgage, or even some tenancy agreements during that period.

It is worth noting that overdraft debts are subject to the standard limitation period. In England and Wales, the Limitation Act 1980 means that if six years pass without the account holder acknowledging the debt or making a payment, the creditor may lose the right to pursue it through the courts. In Scotland, the period is five years under the Prescription and Limitation (Scotland) Act 1973. This does not mean the debt ceases to exist — only that the legal route for recovery becomes restricted after that time.

Options When Repayment Is Not Straightforward

For someone who cannot repay an overdraft balance quickly, several formal and informal routes exist. The right route depends on individual circumstances, and a regulated debt adviser is best placed to explain which applies to a specific situation. The information below describes how each option works generally.

Repayment Arrangement with the Bank

Many banks will agree to an informal repayment arrangement, spreading the overdraft balance over several months through fixed monthly payments. This keeps the debt with the original lender and avoids the account being passed to collections. Contacting the bank's financial difficulty or hardship team — not the general customer service line — is usually the most productive starting point.

Debt Management Plan (DMP)

A Debt Management Plan is an informal arrangement where a person makes a single monthly payment to a debt management provider, which then distributes payments to creditors including the bank. A DMP is not legally binding on the creditor, but many lenders will freeze interest and charges while a plan is in place. There is no fixed legal duration — a DMP runs until the debts are repaid.

Individual Voluntary Arrangement (IVA)

An IVA is a formal insolvency procedure available in England, Wales and Northern Ireland. It involves a licensed insolvency practitioner proposing a repayment plan to creditors, typically over five or six years. Once 75% of creditors (by value) agree, the arrangement is legally binding on all. Any remaining qualifying debt at the end of the IVA term is written off. An IVA affects credit files and the Insolvency Register for its duration.

Debt Relief Order (DRO)

For people with lower incomes and limited assets, a Debt Relief Order may be worth exploring. Since changes introduced in 2024, the qualifying debt limit in England and Wales is £50,000, and the application fee was abolished on 6 April 2024 — meaning there is no longer a £90 charge. A DRO lasts 12 months; if circumstances do not materially improve during that period, the qualifying debts — which can include overdraft balances — are written off. DROs are only available in England and Wales.

Bankruptcy

Bankruptcy is a more serious step, appropriate where debts are larger or other options are unsuitable. Applying online costs £680 in England and Wales. Most unsecured debts, including overdrafts, are included in a bankruptcy. It has significant consequences for assets and credit history, so understanding the full implications before proceeding is important.

Breathing Space — A Short-Term Pause

For someone who needs time to seek advice without creditors taking action, the Breathing Space scheme (formally the Debt Respite Scheme) provides a 60-day pause on most enforcement activity and interest charges. It is available in England and Wales and must be applied for through a registered debt adviser — a person cannot apply directly. During Breathing Space, the bank cannot add interest to the overdraft or take enforcement steps.

This does not extend the time someone formally has to repay the overdraft, but it does create a protected window in which regulated advice can be obtained and options considered without additional pressure from creditors.

Frequently Asked Questions

How long do you have to pay an overdraft back if your bank closes your account?

If a bank closes a current account, it will typically give notice in writing and specify a repayment deadline for any outstanding overdraft balance. The notice period depends on the bank's terms, but 30 days is commonly stated in retail banking contracts. The account holder should check any closure letter or their account's terms and conditions for the exact figure that applies.

Can a bank charge daily fees on an overdraft if repayment takes longer than expected?

No. Since 6 April 2020, the FCA banned fixed daily and monthly overdraft fees. Banks must now charge a single annual interest rate (APR), meaning the cost of the overdraft accrues as interest on the balance rather than as a flat daily charge. This applies to both authorised and unauthorised overdrafts.

Does an unpaid overdraft become statute-barred after a certain time?

In England and Wales, the Limitation Act 1980 means that an unsecured debt — including an overdraft — can become statute-barred after six years if the account holder has not made a payment or acknowledged the debt in writing during that period. In Scotland, the equivalent period is five years. Statute-barred means the creditor cannot pursue the debt through the courts, but the debt itself still legally exists.

What should someone do if the bank has given them less than 30 days to repay?

If a repayment demand feels unreasonably short or the account holder believes they have not been treated fairly, the first step is to raise a formal complaint with the bank in writing. If the complaint is unresolved within eight weeks, it can be referred to the Financial Ombudsman Service at no cost to the consumer. Seeking advice from a regulated debt adviser at the same time is also advisable, as they can explain what options are available given the specific timeline.