No matter how well organised you might be financially, things can change and you may unexpectedly find yourself short of funds. If this happens, one option to consider that may help you manage your cash flow is a personal overdraft.

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How does an overdraft work?

A personal overdraft is linked to your transaction account. It allows you to access additional funds should you run out of your own.

Like most loans, by accessing your overdraft you’ll be charged interest on the money you borrow. If, for example, you have an overdraft limit of $1,000 but only use $50, you’ll pay interest on the $50 that you use.

With a CommBank Personal Overdraft, there are no set minimum monthly repayments, so you can control when you pay the money back. Just remember that you should try to pay back what you use from your overdraft as soon as you can to minimise any fees and interest.

What are the costs of a personal overdraft?

Most overdrafts come with fees attached, as well as an interest rate. It’s important to make sure you understand all the charges that can apply before setting up a personal overdraft so that you don’t get any surprises down the line.

An overdraft will usually come with an establishment fee, a monthly administration fee and also a fee if you go over your agreed overdraft limit. With CommBank’s Personal Overdraft, there is no establishment fee and the most you’ll pay in administration fees is $15 a month.

You’ll also be charged interest on any funds you use. Interest is calculated daily on your owing amount and charged monthly, along with your administration fee.

What about a credit card or personal loan?

Depending on your circumstances, a credit card or personal loan may be more suitable than a personal overdraft. They each offer you a way to borrow money, but the way you want to use that money and also repay the debt will help guide you in the right direction towards the right product.

Learn more about our personal overdrafts

Explore personal overdrafts

Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on this, consider the appropriateness to your circumstances.