This is how you balance your expensive disposition Spend more money than is actually in the account: When major purchases are due, many consumers are tempted to use their overdraft facility. But the overdraft goes hand in hand with high interest rates. In many cases, debt rescheduling and redemption through a special loan for the overdraft facility are worthwhile. Who actually writes and advises here? About us On this page Where can I get credit for overdraft facility? Why does debt restructuring make sense? Requirements for overdraft facility What should you look for in the case of a loan for overdraft facility? Compare loans directly Use the free credit comparison below on this page and find the best conditions!
Where can I get a credit for the overdraft facility?
You should not apply for a credit for the overdraft facility at the bank where you have the overdrawn checking account. Even if your house bank classifies you as creditworthy, they usually have little interest in replacing the overdraft facility because they would then have to forego high interest income.
You can get installment loans on favorable terms from other branch banks or from direct banks. Since usually comparatively small sums have to be paid off, a so-called instant loan is suitable for overdraft facility. You can apply for this online and receive it immediately after checking your creditworthiness. The loan amounts for instant loans are up to 10,000 USD depending on the provider. Alternatively, private loans are also available, which are arranged via various online portals.
Before you decide on a credit for the overdraft facility, you should carefully compare the offers. The conditions for consumer loans differ significantly from bank to bank.
What is an overdraft facility?
At the end of the month there is suddenly a major repair of the car, the dishwasher breaks or you might want to treat yourself to a vacation that exceeds your budget (see also credit for car repair and credit for vacation). In such and similar cases, many consumers find it tempting to use the overdraft facility.
Overdraft facilities or overdraft facilities stand for the overdraft facility. The term is derived from the Latin “disponere”, which means “to dispose”. With a overdraft facility, your bank provides you with a limited overdraft facility for your checking account. So within a pre-determined framework, you can spend more money than is actually in the account.
Almost all solvent consumers can avail themselves of an overdraft facility, and banks do not require special guarantees. The amount of the overdraft granted depends on the personal creditworthiness as well as on the amount and regularity of the incoming payments in the checking account. Banks may not charge any further processing fees for the overdraft facility. However, you can cancel the overdraft facility at any time if the financial situation of the account holder changes.
Why rescheduling the MRP makes sense
Overdraft facility is practical for bridging short-term payment bottlenecks. If the account is in the red for a long time, this can quickly become expensive. The flexibility of the overdraft facility allows banks to pay high interest rates. Banks calculate the target interest variably based on the current market interest. Depending on the financial institution, the borrowing rates for the overdraft facility range between seven and 15 percent. If the overdraft exceeds the overdraft limit, further overdraft interest accrues.
Due to the high interest rates, the monthly financial burdens from the overdraft facility increase rapidly. If you have exceeded your overdraft limit and cannot settle the arrears promptly, you should consider rescheduling. To trigger the overdraft facility, take out an installment loan. Because you get installment loans on much cheaper terms, you pay less interest and there is more money left each month.
You should take out the credit for the overdraft facility as early as possible. If your bank is already pushing to make up for the arrears, it can quickly lead to a negative Credit Bureau entry. Then it is difficult to get another installment loan.
… More about credit What are the requirements for overdraft facility compensation?
If you would like to offset your overdraft facility with another loan, you can basically use any installment loan. Consumer loans are not earmarked, so you can use them for what you want – even to balance your account. In order for the loan application to be approved, borrowers must meet the following requirements:
- You are at least 18 years old.
- Their main residence is in Germany.
- You have had regular income for at least three months.
You must provide proof of your income, for example through the bank statements of the past months, pay slips or other proof of income. Lenders also obtain Credit Bureau information to find out about your solvency. If your account has been in the red for a long time, this has a negative impact on your credit rating. You will therefore probably not receive any credit for the overdraft facility from your house bank. If your credit rating has deteriorated significantly due to the overdraft facility, the bank may even cancel the overdraft facility and request immediate repayment.
What should you look for in a loan for the overdraft facility?
You can recognize the actual cost of the loan by the APR. In contrast to the borrowing rate, the effective interest rate also includes other credit costs and fees. For many loan offers, the amount of the APR depends on the borrower’s credit rating.
You should choose the loan amount so that a small cushion remains after the overdraft facility has been paid off. In addition, create a household bill and determine the rate you can afford per month. You set the term of the loan accordingly. If you choose a shorter repayment period, you can save interest and the loan is generally cheaper. However, this increases the amount of monthly payments. With a longer loan term, you pay lower installments, but interest also accrues over a longer period.
It makes sense if the loan allows free special repayments for the overdraft facility. Once you have more money available, you can repay a larger sum in one fell swoop. This shortens the loan term and reduces the total interest accrued.