If you have a good and regular income, you will surely have been given an overdraft facility by your house bank. A small extension of the current account, which allows the overdraft within a certain range, without the risk of an account lock. Many account holders find this tolerance of the bank very good and use it from time to time if there is still a lot of money left at the end of the money or if purchases are to be made that exceed the financial framework.
As long as the overdraft facility cannot be quickly compensated for, there is nothing to be said against this practice. Because using the money saves you the long search for a loan and you can react intuitively and promptly. However, if the overdraft facility is used regularly and on a long-term basis, it must be considered whether a credit for overdraft facility compensation would not be a good way to break out of the use of the overdraft facility. Because the use entails very high debit interest, which in many cases is well over 10 percent.
Many consumers ignore the costs
Many customers are not even aware that scheduling is such a costly affair. They don’t see the interest charge at the beginning and therefore handle the money from the overdraft facility very lightly. Only when the first interest is due at the end of the month are you amazed at how much money is lost at this point. Then, however, it is usually too late to take countermeasures quickly, because the overdraft facility is exhausted to such an extent that quick compensation is no longer possible. What follows is a lengthy struggle to reduce debt that costs a lot of money and produces a lot of frustration. However, if you react in time and take out a loan for overdraft facility, you can save yourself all this trouble.
What can a loan for overdraft facility
A credit for overdraft facility can summarize the accumulated debts from the overdraft facility and make it available in a cheap loan for the settlement. As a rule, those affected use an installment loan, which is best suited as a loan for overdraft facility, because it can be easily adapted to the project. Not only can the loan amount be freely chosen. The rate can also be determined completely freely. And if you have a little patience and make a comparison, you will even be able to take advantage of a particularly favorable loan offer and thereby determine the interest rate yourself.
Where is the credit for overdraft facility compensation?
We recommend that you do not take out the credit for the overdraft facility from the house bank, as the latter will have only limited interest in the overdraft facility. After all, she can make good money from using it, which no bank is happy to miss.
It is better if the installment loan for the compensation is excluded from the overdraft facility at an independent bank. Since an installment loan is not earmarked, there is no need to notify the use of the loan. Therefore, the bank does not know that the money from the loan should flow into the overdraft facility and the offer around the loan can be very good and therefore worthwhile.
Is the Credit Bureau needed?
Even if the credit is needed to compensate for the overdraft facility, nobody will be able to avoid asking Credit Bureau. Because every bank in Germany asks Credit Bureau before lending. The Credit Bureau query is only omitted for a foreign loan, since the foreign bank is not allowed to obtain any information. A foreign loan is only worthwhile to a limited extent, however, because it is accompanied by a rather high effective interest rate, which can be as high as the overdraft interest rate. Therefore, a foreign loan should only be used for compensation in an emergency.