$500 bank overdraft

[strongy1986]

So the bank offered me a $500 overdraft. I have used it a couple of times in the last 3-4 months to pay bills in a timely manner.

Fast forward to now and we are trying to get a home loan with a different bank. The bank manager there said that it might work against us having used the overdraft.
Is this correct or is he making a big deal about nothing

In the same period we saved 7k in a different bank account - poor money management I know!

 

[Terry_w]

big deal about nothing - potential $500 debt!

 

[Rolf Latham]

Hi Ben

Typically an overdraft isnt supposed to be used as a resilient credit debt thing, more as a an occasional use.

If you trust the banker, then dont apply with that bank if that works for you.

if applying elsewhere isnt suitable, and you are declined ( on the basis of the overdraft) you might want to let the bank know they apprpved the same facility for you to use.........................

ta
rolf

 

[Evachange]

Agree $500 debt is not really an issue with servicing, have had clients with $20k overdraft, no issues as long as its in order and they can service the new debt.

 

[Brady]

Bank manager has no idea, it's an overdraft not overdrawing.

As long as you have a good balance sheet and can service the debt shouldn't be a problem.

 

[tobe]

how does the bank you are applying with know that you used the o/d? you will have told them the limit, but they wont know you used it unless you have given them those statements which show it.

Even then it shouldnt be relevant if it was operated within its guidelines.

 

[Cards]

Check your credit file on Veda.

I have one for 2k & the bank hit my credit file.
The same as a credit card would, so be mindful that its still bad debt.

As others have said, If you can service then there's no issues.

 

[Corey Batt]

Bank manager has no idea, it's an overdraft not overdrawing.

As long as you have a good balance sheet and can service the debt shouldn't be a problem.

This.

If a $500 overdraft facility would tip you over from a serviceability perspective, you're realistically overstretched with that particular lender.

 

[strongy1986]

Thanks for responses

I was worried that it would show up on credit file - sounds like not the case

I think next time we will be going with a broker just thought it might be easier because they already had our file

Yes we gave 3 monthsstatemts which showed we had used od facility a couple of times - he thought that might be an issue with credit

Anyway see how we go

 

[Brady]

I wouldn't recommend speaking with the same banker again, if it was a branch manager they might not even be lender trained. Brokers can do silly things like this also, it's all the person you're dealing with.

Speak with a banker or broker who knows what they're doing.