Most bank customers who have a regular income received a credit facility from their bank along with their checking account. There are banks that wait until the customer makes an application, while others automatically provide the overdraft facility. The amount of the overdraft facility is based on the monthly income. Usually, up to three net monthly salaries are provided. The overdraft facility is a quick loan and easy to use, but many customers have already got into the so-called dispo trap and had to take out a loan despite the overdraft facility.
The initial situation
The overdraft facility is a loan that has already plunged many customers into despair. The quick approval and provision of course seduces more than once for uncontrolled use. However, if the overdraft facility is only used and nothing is ever returned, it will add up automatically. How will some ask?
Banks willingly provide overdraft facilities, but often charge very high interest rates. There are banks that charge an interest rate of 15%. If the customer then exceeds the credit line granted, the bank adds another 5%. That gives an interest rate of no less than 20%. Nobody would take out a loan with such a high interest rate despite overdraft facilities. Here the customer should speak to the bank or look for another money house that has better conditions.
Every quarter, the bank posts its interest invoice to the customer’s account. If not at least a small amount is deposited on it or left standing, it will always increase. At the latest when the incoming salary no longer covers the overdraft facility, it is time for a loan despite the overdraft facility. But it also happens that the overdraft facility is fully used, the salary has not yet been received, and the bank will then no longer make transfers. The first return debits arrive with the result that negative entries occur and they have unpleasant consequences.
If a loan now has to be taken out despite the overdraft facility, then the overdraft facility should either be completely removed or at least greatly reduced. Who knows that he cannot handle the overdraft facility carefully, should do so, because there is a great risk of spending more money than is there again. The result could be another loan despite the overdraft facility, which is already under an unfavorable star.
A call to the bank is often enough and the overdraft facility is set up. Especially when it is the first time, the bank will check the customer’s creditworthiness. All you need to do is take a look at the current account and query the Credit Bureau. If the signal is green, the overdraft facility is set up.
The credit rating can be restricted
Anyone who is always in the red because the customer can no longer make do with income when the monthly liabilities have gotten out of the way must act. In addition to replacing the overdraft facility, debt restructuring could also be pending here. Especially when the financial obligations become too great that the customer has lost track of things, it should be considered.
Loans and installments could be combined into one loan despite the overdraft facility, with the result that the customer would only have to pay one creditor. However, debt rescheduling should generally only be undertaken if the bottom line is savings. This can show up in a reduced rate, possibly with a longer loan term.
If there is a credit default or the bank no longer carries out transfers because the overdraft facility is hopelessly overdrawn, a loan is available despite the overdraft facility. It is important to act in good time, because if there is a negative entry in Credit Bureau, it will be difficult to obtain credit. The risk of default is simply too high for the banks, especially since the overdraft shows that over-indebtedness may have already started.
Therefore, action should be taken in good time. The customer should know that the overdraft facility is also entered in the Credit Bureau, but is not evaluated there. Only if the credit line is overdrawn does this appear as a negative entry. Of course, this also includes the bank’s return debits. If you use your overdraft facility, you should always remember to leave so much that all liabilities can be debited.
The loan brokerage
If it happens, the negative entry is in the Credit Bureau, the customer usually receives no more loans from a Cream bank. As a way out, but only when there is an urgent need for money, the Credit Bureau-free loans could be mentioned. They are called Swiss credit in particular, as they came primarily from Switzerland until 2009. As far as is known, these loans have mainly come from Liechtenstein since 2010. This type of loan is mediated by reputable credit agencies.
The credit in spite of overdraft facility may already be one of the difficult loans that are in good hands when brokering a loan. They are familiar with banks that do not advertise, but which also grant a loan if the Credit Bureau is bad. However, the customer has to pay a high interest rate for this. Depending on how his credit rating is classified, there can be an interest rate of up to 17%. The Credit Bureau-free loan from Liechtenstein is also not a cheap product. The customer must accept interest in the double-digit range.
Credit brokers promise customers the blue of the sky in their advertising statements. Loans for garnishment, loans for no income, loans for bankruptcies, they are the right contact, none of this is true. The customer should not fall for such a windy loan brokerage. In general, credit inquiries with the associated loan offer will be free of charge. There are no preliminary costs or the signing of insurance contracts, just think of the popular building society contracts.
The credit intermediary receives a commission for its services, but only when the loan approval has been given and the money has been instructed. The customer can contact strong brand-certified agencies or the German Company, which also has a list of reputable agencies.
The loan application is easy to make. The customer enters data in the form provided, on the basis of which the credit intermediary will make a preliminary loan approval. A final loan approval may not be sent until all credit documents, such as pay slips from the past three months, bank statements from the same period, a copy of the employment contract and a small household bill, are available.
Despite the overdraft facility, the customer must have a regular income for the Credit Bureau-free loan and a permanent job that has existed for at least one year.