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AIB overdraft. help needed to understand!

  • 21-09-2015 12:37pm
    #1
    undersun
    Registered Users Posts: 16 ✭


    Hi,
    I have never had any overdraft before in my life so i know very little about it.
    If anyone could help me understand it then it would be hugely appreciated.

    First to all the facts:
    Theres a facility rate of 25,39 euro each annul or on each overdraft.
    The interest rate is 11,85%
    If i would use more money then agreed over draft then there is a interest rate of 12%

    I have a overdraft of 500 euro each month that i could use.
    Now in my mind i have this fear that when the quarterly charge will come i would suddenly stand there with a huge bill over 1000 euro that i cant pay back.

    So i want to understand this calculation so i know how much i have to pay if i want to use my over draft. Also there might be someone here who is in the same situation and would appreciate this thread.

    So lets say i spent 500 euro in one day and it takes me 30 days to pay it back how much would i need to pay back?

    Second scenario.
    Lets say i spend 500 in one day. How much would one day of overdraft cost me?

    and to understand the 11,85% rate. lets say in a quarter of a year i spent 1000 in over draft. Will the 11,85% be taken of the full amount or will it be drawn for each day? ( meaning each day on over draft would cost me 11,85% of what i used?)

    I feel unsure and very confused how to should calculate this.
    Any help would be so much appreciated.
    Thank you for your time!


Comments

  • #2
    Frynge
    Registered Users, Registered Users 2 Posts: 1,667 ✭✭✭Frynge


    First off, the facility fee of €25.39 is payable quarterly but charged on an annual basis. So every three months there will be an overdraft facility charge of €6.35.

    Now the interest on the overdraft is 11.85% which is the annual interest, but it is charged daily on any overdrawn money. The equates to an effective 0.0306865% per day.

    To cover three possible scenarios;

    So you use €500 on day one and 30 days later pay it back, this will cost €4.60. If that is done three months in a row it will cost (€4.60 X 3) + €6.35 = €20.15.

    If you use €500 on day one and pay it back over 30 days in equal amounts it will cost you €2.38 in interest for that month. (You would also incur one twelfth of the annual facility charge, but it won't be charged for another two months).

    If you use €500 on day one and pay it back over 90 days (or quarterly) in equal amounts, it will cost you €6.98 in interest plus €6.35 so €13.33 after 3 months.

    The maximum your overdraft could cost for an entire year is 11.85% of €500 plus the facility fee of €26.39 so €85.64. Assuming you remain at the constant limit of €500 everyday for the entire year.

    One very important thing to be carful about is the over limit fee of €7.00 which will be applied to your account every time you exceed the limit.

    A possible handy way of keeping an eye on what it is costing you is that when you are at the €500 limit it will be 15 cent in interest roughly.


  • #3
    49cmj
    Registered Users Posts: 12 ✭49cmj


    Frynge wrote: »
    First off, the facility fee of €25.39 is payable quarterly but charged on an annual basis. So every three months there will be an overdraft facility charge of €6.35.

    Now the interest on the overdraft is 11.85% which is the annual interest, but it is charged daily on any overdrawn money. The equates to an effective 0.0306865% per day.

    To cover three possible scenarios;

    So you use €500 on day one and 30 days later pay it back, this will cost €4.60. If that is done three months in a row it will cost (€4.60 X 3) + €6.35 = €20.15.

    If you use €500 on day one and pay it back over 30 days in equal amounts it will cost you €2.38 in interest for that month. (You would also incur one twelfth of the annual facility charge, but it won't be charged for another two months).

    If you use €500 on day one and pay it back over 90 days (or quarterly) in equal amounts, it will cost you €6.98 in interest plus €6.35 so €13.33 after 3 months.

    The maximum your overdraft could cost for an entire year is 11.85% of €500 plus the facility fee of €26.39 so €85.64. Assuming you remain at the constant limit of €500 everyday for the entire year.

    One very important thing to be carful about is the over limit fee of €7.00 which will be applied to your account every time you exceed the limit.

    A possible handy way of keeping an eye on what it is costing you is that when you are at the €500 limit it will be 15 cent in interest roughly.

    Hi just wondering i have overdraft of 500euro. Today i went over my overdraft limit by 80euro. Will i have to pay €7 daily on this or just the once off payment do you know ? Thanks


  • #4
    RoyalMarine
    Closed Accounts Posts: 5,824 ✭✭✭RoyalMarine


    49cmj wrote: »
    Hi just wondering i have overdraft of 500euro. Today i went over my overdraft limit by 80euro. Will i have to pay €7 daily on this or just the once off payment do you know ? Thanks

    One off payment for going over the 500 limit.
    Bring it down below 500 before making any more withdrawals.
    Every time you go over 500, or withdraw while past 500, it will incur a 7 euro charge.


  • #5
    49cmj
    Registered Users Posts: 12 ✭49cmj


    RoyalMarine wrote: »
    One off payment for going over the 500 limit.
    Bring it down below 500 before making any more withdrawals.
    Every time you go over 500, or withdraw while past 500, it will incur a 7 euro charge.

    Ok i get paid next week so if i dont make any more withdrawels between now and then i wont be charged any more than €7 ? Thanks for your help


  • #6
    49cmj
    Registered Users Posts: 12 ✭49cmj


    I have had an overdraft of €1300 the past 3 months. When i asked the aib web chat they said ill be charged daily on my overdraft so am i going to be charged €130 a day so end up being close to €10000 in overdraft fees this month ? Can anyone explain thanks


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  • #7
    ceegee
    Registered Users, Registered Users 2 Posts: 2,235 ✭✭✭ceegee


    49cmj wrote: »
    I have had an overdraft of €1300 the past 3 months. When i asked the aib web chat they said ill be charged daily on my overdraft so am i going to be charged €130 a day so end up being close to €10000 in overdraft fees this month ? Can anyone explain thanks

    Interest will be about 40 euro (going by my quick attempt at working it out - might be slightly out). If you've gone beyond your overdraft limit there may be some additional fees (someone above said 7 euro per transaction)


  • #8
    Doctor Shivering
    Closed Accounts Posts: 184 ✭✭Doctor Shivering


    49cmj wrote: »
    I have had an overdraft of €1300 the past 3 months. When i asked the aib web chat they said ill be charged daily on my overdraft so am i going to be charged €130 a day so end up being close to €10000 in overdraft fees this month ? Can anyone explain thanks

    Don't be silly
    AIB aren't a pay day lender
    If it's an agreed overdraft and you're under the limit and the rate is say 10% and it's €1300 overdrawn for an exact 12 months then it's 10% of €1300 you will owe them plus the facility fee
    For 3 months that will be a quarter of €130 plus the facility fee i.e. about €33 + the quarterly fee so roughly €40 in total for the 3 months

    Btw don't go over the limit as the automated system might bounce payments and that's more fees along with the embarrassment


  • #9
    49cmj
    Registered Users Posts: 12 ✭49cmj


    ceegee wrote: »
    Interest will be about 40 euro (going by my quick attempt at working it out - might be slightly out). If you've gone beyond your overdraft limit there may be some additional fees (someone above said 7 euro per transaction)

    Hi thanks for your help but are you sure about that ? I dont even mind if it costs a few hundred its just the aib web chat person made it out as if i have to pay 11% a day on €1300 ? Thanks


  • #10
    Doctor Shivering
    Closed Accounts Posts: 184 ✭✭Doctor Shivering


    49cmj wrote: »
    Hi thanks for your help but are you sure about that ? I dont even mind if it costs a few hundred its just the aib web chat person made it out as if i have to pay 11% a day on €1300 ? Thanks

    He meant a portion of the 11%
    It's an Annual rate (Apr)
    You took him up wrong which is easy to do when not used to it


  • #11
    ceegee
    Registered Users, Registered Users 2 Posts: 2,235 ✭✭✭ceegee


    49cmj wrote: »
    Hi thanks for your help but are you sure about that ? I dont even mind if it costs a few hundred its just the aib web chat person made it out as if i have to pay 11% a day on €1300 ? Thanks

    Interest rates are annual, so you would 11% per year. For 3 months you would be paying 3/12 of 11.85%. So for 1300 the interest is 1300 x (3/12 * 11.85%) =38.51


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  • #12
    49cmj
    Registered Users Posts: 12 ✭49cmj


    ceegee wrote: »
    Interest rates are annual, so you would 11% per year. For 3 months you would be paying 3/12 of 11.85%. So for 1300 the interest is 1300 x (3/12 * 11.85%) =38.51

    Cheers yous were both a lot more help than aib


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