An overdraft facility is nowadays almost part of the current account, because the possibility of being able to draw on a granted overdraft facility in the event of a financial bottleneck offers a degree of reassuring security for the account holder. However, the interest rates for overdraft facilities are often quite high.
It is worthwhile for bank customers to compare overdraft facility interest rates and also to consider switching accounts with significantly better conditions. When opening a new current account, the interest rates for an overdraft facility and the tolerated overdraft should be considered from the outset, even if an overdraft facility is not required for the time being.
Overdraft interest comparison
In our overdraft facility comparison, the interest rate for the overdraft facility can be found for each account. How to find the account with the best conditions.
Legal notice: this comparison does not represent a complete market overview. The order of the presented accounts is random.
Set up or increase overdraft facility
The overdraft facility is by its nature a framework credit. According to the requirements, the account holder is granted a credit line, which he can exhaust. For the use of the credit he pays debit interest, which varies significantly in amount depending on the bank. From 8 to 16 percent overdraft interest rates, the range is far apart, which is why consider overdraft interest in comparison can bring a big savings. The tolerated overdraft costs even more. This is spoken of when officially no overdraft facility has been established and the balance is overdrawn or an overdraft of the actual credit line occurs.
To apply for an overdraft facility, certain requirements must be met by the applicant. This includes the age of majority. Persons under 18 years do not receive a credit of any kind. The applicant must have regular and recurring income or salary, which is also the basis for the maximum amount of the overdraft facility. The creditworthiness of the applicant is another criterion. This is always requested by banks when opening an account for a current account with overdraft facility. The result, for example of the schufa query, decides whether the bank will set up an overdraft facility. If there is no negative schufa entry and the applicant's credit score is satisfactory, there is usually nothing to be said against the overdraft facility. Even if other loans are already noted in the schufa, this does not automatically mean that no further credit can be taken out. A dispo despite credit is possible as long as the applicant properly serves its creditors and the proportionality of income, expenses and loan amount do not argue against further borrowing.
The amount of the overdraft is based on the regular income of the account holder and is usually determined individually for the customer by the bank. The maximum amount for the overdraft facility is often given as three net monthly salaries, although it is not possible to make a general estimate. Who can show a very high net income, the bank will not necessarily refuse also a correspondingly high overdraft facility. It always depends on the individual case.
Bank customers are not permanently bound to the overdraft facility once granted. You can reduce your overdraft limit at any time if you have previously re-balanced your account. As a rule, a notification to the bank is sufficient and the new, lower credit limit is confirmed in writing. Who increases the overdraft facility or. If you would like to extend the credit limit, you can ask the relevant bank in person, by telephone or by e-mail whether this can be done. However, the income level of the account holder must also allow for an increase. It should be noted that the higher the overdraft facility, the more difficult it can be to settle it if the credit amount is used. This in turn affects the overdraft interest rates.
Dispo comparison
Dispo interest in comparison to compare the best conditions quickly shows. Of course, the other conditions for the account should also meet their own needs when it comes to the ideal account for the individual. Basis for the overdraft interest are generally the key interest rates on the capital market, however, the banks let themselves pay this overdraft already times neatly as horrendous overdraft interest of up to 16% show. The banks take into account the account holder's creditworthiness and income when determining the interest rate.
The overdraft interest rate is variable and thus can be changed up or down at any time. An average overdraft facility interest rate is determined almost annually by consumer and financial magazines, which is why this information is always subject to fluctuations. For consumers who want the cheapest overdraft facility rate, an average interest rate of 11% can be given in 2016.
Reschedule overdraft
The overdraft facility is intended as a short-term framework loan that should be paid off as quickly as possible. Only then also high costs can be avoided. Unfortunately, however, many account holders remain stuck in the overdraft facility permanently and even for years, because it hardly seems possible to balance the overdraft due to changes in income or increased expenses. Anyone can slip into this dispo trap. Whether you have to stay trapped in it is another question. Balance the overdraft with a loan is shown here as the best solution from experience to get out of the vicious financial circle of high overdraft interest and permanent debt. It is recommended to have the overdraft converted into an installment loan. This can be done at your own bank or at another bank by a redemption. About the amount of the overdraft facility, the account holder takes an installment loan with favorable interest rates and appropriate term. The overdraft facility is discharged directly and should then also be sensibly discharged completely in order to prevent a renewed debt spiral.
Dispo for different target groups and account types
The overdraft facility is offered for employees, salaried employees, civil servants, trainees and apprentices, students, self-employed persons, pensioners. A trainee or student must be of age to be able to conclude a loan agreement of this type. The overdraft facility is predestined for the current account, sometimes it can also be set up for a business account, although here the overdraft facility is the standard variant. If the private current account is set up as a joint account with several account holders, then an overdraft facility is also possible, whereby joint and several liability applies to all account holders.
Calculate dispo
How high the costs for the overdraft facility in the billing period, everyone can calculate with a simple formula: balance (amount of credit used) x interest rate x duration of the overdraft / 36000.
Example:
The stated overdraft facility interest rate of a bank is 13.5% p.A., the account holder takes 500 euro overdraft and pays it back after 15 days.
The calculation: 500 x 13.5 x 15 / 36000. The overdraft interest is then 2.81 euros.
Depending on the bank, there may be differences in the days of a year (360/365 days) and the days of a month (30/31/28 days) used as a basis. To consider dispozinsen in the comparison is worthwhile itself therefore also for the computation of the fees already in the apron, because in such a way the cost comparison becomes still more realistic.
Advantages
The advantages offered by the overdraft facility are obvious:
- Bridging financial bottlenecks
- Easy availability
- Fees/interest are only charged for the amount drawn down
- Easier to obtain than other loans
- Disporahmen is limited by the monthly income
Disadvantages
The advantages are also countered by disadvantages:
- High interest rates for the overdraft / tolerated overdraft
- Risk of remaining permanently in the red, debt
- If the requirements are no longer met, the bank can immediately terminate the overdraft facility without notice, and the account holder must balance the account immediately
The overdraft facility in difficult and special "cases
The basic requirements for obtaining an overdraft facility are: age of majority, regular income and creditworthiness. But in practice it is more differentiated, if you take a closer look at the type of income and special debt ratios.
Social benefits such as unemployment benefits I and II or parental allowance are not counted as income by the banks, as they are not attachable. Therefore, the approval of an overdraft facility in a specific case depends on other factors. This concerns, for example, people on parental leave and the unemployed, although an overdraft facility is not usually granted to hartz 4 recipients. It can also be problematic for workers and employees in the probationary period, since here it is not yet foreseeable whether the employment relationship will actually be continued and thus the monthly income is secured.
What is the situation with an overdraft facility after private insolvency?? Anyone who has gone through personal insolvency is free of debt again after the discharge of residual debt, but is far from being creditworthy for banks again. For banks and credit institutions, the most important thing is your income situation. In the schufa, the note about a private insolvency remains stored up to three years after the residual debt discharge, albeit with the note: "done". However, this can still be a reason for banks to refuse an overdraft facility. An overdraft facility without schufa is possible with a few credit institutions, although here it is necessary to weigh due to the higher costs and overdraft interest in comparison.
Dispo or framework credit
In terms of their nature, both types of credit hardly differ, because the interest rates are variable, a granted credit line can be used up to the full amount, the credit is not bound to fixed terms and in principle, the repayment of overdraft facility and framework credit is flexible. However, the difference is clearly in the interest rate, as interest rates for the line of credit range between 6% and 8% on average, much lower than for the overdraft facility. Weighing overdraft interest rates in comparison with line-of-credit interest rates in comparison can therefore be worthwhile.
Overdraft or installment credit
Whether the customer chooses an overdraft facility or an installment loan depends on whether, on the one hand, he or she only wants to bridge a financial bottleneck in the short term and, on the other hand, on how high the required loan amount is. Since the overdraft facility is within manageable limits and is based on the monthly regular income, it is intended rather for small amounts. Repayment should be made quickly due to the interest on overdraft facilities. An installment loan can be for a wide variety of terms, from a few months to many years. Rate levels can also be customized. The longer the term, the lower the monthly payment. However, various banks also make the interest rate dependent on the credit rating. The debit interest for the installment loan is fixed, in contrast to the variable overdraft facility interest rates. With an installment loan, an existing overdraft facility can also be rescheduled.
Cancel overdraft facility
Both the bank and the customer can cancel the overdraft facility. While the customer must adhere to notice periods depending on the agreement, the bank has the right to terminate the overdraft facility at any time without notice if there are justified reasons. If the current account is balanced, the cancellation of the overdraft facility on the part of the account holder is not a problem, often this can be settled quickly in person, by telephone or via e-mail, if the bank does not insist on special forms. For joint accounts, the consent of all account holders is required to cancel an overdraft facility.