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Emergency

Overdraft canceled or reduced: what to do when the account slips into the red?

An overdraft can be canceled by both sides at any time. If the bank reduces or cancels the overdraft while your account is in the red, you have to settle the overdrawn amount. What matters is quickly finding a manageable solution before expensive overdraft interest or an account block threatens.

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Your chances of getting your money back

An overdraft is in principle cancelable by both sides. If the bank cancels, the amount used falls due. But you should get a reasonable deadline and, in case of hardship, an installment solution.
Instead of an expensive overdraft, the negative amount can often be refinanced into a cheaper installment loan. In a financial emergency, debt counseling helps find a manageable arrangement.

What you should do now

  1. 1

    1. Clarify deadline and amount

    Have the due amount and the repayment deadline confirmed in writing.

  2. 2

    2. Propose an installment solution

    If you cannot settle it at once, offer the bank an installment payment and document the arrangement.

  3. 3

    3. Consider refinancing

    Consider a cheaper installment loan to pay off expensive overdraft interest.

  4. 4

    4. Get help

    In a financial imbalance, turn to a recognized debt counseling service, this is often free.

How to spot the scam

  • High overdraft interest is running while the balance stays in the red.
  • The bank threatens an account block or cancellation of the account.
  • You take out a new expensive loan without checking the overall situation.

Frequently asked questions

May the bank simply cancel the overdraft?

Yes, the overdraft is in principle cancelable by both sides. On cancellation, the amount used falls due. But you should get a reasonable deadline and, in case of hardship, an installment solution.

Do I have to settle the negative balance immediately?

In principle yes, once the overdraft is canceled. If you cannot, propose an installment payment to the bank. Often refinancing into a cheaper installment loan makes more sense than expensive overdraft interest.

What if I am in a financial emergency?

Turn to a recognized debt counseling service, the advice is often free and helps find a manageable solution with the bank and other creditors before debts pile up.

Take action now

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.