What’s the difference between an arranged and unarranged overdraft?

An arranged overdraft is where we agree an overdraft limit with you, before your account goes overdrawn.
An unarranged overdraft is when you authorise a payment that would take your account overdrawn or beyond your arranged limit without agreeing in advance an overdraft to cover it. An unarranged overdraft may incur higher charges than an arranged one as a result of charges for returned cheques, direct debits and / or standing orders and may adversely affect your credit file.