What happens to your overdraft when you switch bank?
Your overdraft stays with the old bank. The new bank has to agree to lend you enough to cover it, or you pay it off before the switch date.
4 Oct 2026 · 4 min read
An overdraft is money you owe your old bank, and a switch closes that account. So the new bank has to agree to lend you enough to cover it, or you pay it off before the switch happens.
HSBC says "You may be able to switch bank accounts with an overdraft, but check with your new bank first. You may have to repay the overdraft before you can switch."
What each bank says
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NatWest says switching with an overdraft is "often done on a case-by-case basis", and "In cases where it’s not allowed, you will have to repay the overdraft before starting a current account switch."
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RBS says "If you do not come to an agreement with us you must make separate arrangements to repay your existing overdraft before you switch."
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Lloyds says "Before you switch, speak to us and we’ll let you know if you’re eligible for an overdraft. This will depend on our lending criteria and your credit status."
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Nationwide says "We cannot guarantee you’ll get the same arranged overdraft as with your old provider."
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The Co-operative Bank says "Debit balances are not transferred."
The order to do it in
Asking for an overdraft means a credit and affordability check. If you’re planning several switches, our post on credit scores explains how they show on your file.
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Ask the new bank for an overdraft when you open the account, and wait for the answer.
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If it covers what you owe, tell the new bank the balance and pick a switch date.
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If it doesn’t, pay the old overdraft off first, then switch.
Money still arriving at the old account
After a switch, payments sent to your old account are redirected for you. Danske Bank warns that "your old bank is entitled to use any funds it receives in settlement of the debt on your old account." So if you still owe the old bank, it can keep money passing through to pay off what you owe.
The debt is still there after the switch. Sort the overdraft out before the switch date.
Interest-free overdrafts
Student and graduate accounts often come with a 0% overdraft. Switch that account away and the overdraft goes with it, and the new bank is unlikely to match it. If you rely on it, keep that account and open a second ordinary account to switch instead. Our post on switch bonuses for students has more.
What we do about it
Bank Switcher plans every switch around a spare account, so an overdraft on your main account stays where it is.