The use of the overdraft facility is convenient, but involves significantly higher interest rates than an installment loan. For this reason, it is advisable to only use the discount scheme for short-term financial needs and not to use it as a replacement for a consumer loan.
Consumer associations demand that giro banks offer their account customers a cheaper credit for overdraft settlement if they are used for a long time. More and more credit institutions are meeting this demand, but the loans they propose are often more expensive than the loans from cheaper online banks.
Make price comparisons and pay attention to flexibility
In contrast to the overdraft facility, a credit for overdraft facility is linked to the obligation to pay the monthly installments on time. Borrowers can receive the flexibility of their overdraft facility to a small extent if their loan agreement to redeem the overdraft facility provides for the right to suspend payments annually and the possibility of free special repayments. Especially with a loan for overdraft facility compensation, it makes sense to accept a slightly higher interest rate than the cheapest offer, if this is connected with a partially flexible repayment.
With regard to the private credit checker request, the overdraft facility used does not in principle prove to be an obstacle, since there are no fixed repayment obligations and the private credit checker information only shows the existence of a framework, but not its use. An overdraft of the overdraft facility, on the other hand, is considered improper account management and usually leads to a rejection of the loan application if the requested loan bank requests account statements or obtains bank information.
Avoid new debts after clearing your account
A credit for the overdraft facility does not usually have an effect on the amount of the credit limit, unless it is taken out by the house bank that holds the account. The bank customer thus has the option of using the overdraft facility again immediately after balancing the account or even paying the credit installments with the overdraft facility. This behavior inevitably leads to the account holder using the credit used for the overdraft facility after a short time and his account again showing a high debit balance.
The most effective way to avoid recourse to the overdraft facility is to choose the longest possible loan term. This reduces the monthly installments, even if the total cost of the loan increases due to the annual interest payments. These additional costs are low in comparison to the possible high interest rates again.
Private loan to offset the overdraft facility
In principle, a loan for overdraft facility can be taken out via a platform for personal loan brokerage. Since the borrowers registered there are largely oriented towards the purpose, loan seekers must convince them of the need to subscribe to their request. The first impression when making a credit request for overdraft facility compensation is that the applicant does not have to rely on the loan for a mandatory purchase, but can continue to use the current account available in the event of an unsuccessful request.
For this reason, the request made should indicate that the account holder is absolutely dependent on a private loan that is cheaper than the overdraft facility, since he can no longer bear the high overdraft interest. He can provide comprehensive information on the personal financial situation without hesitation, since the platform operator guarantees data protection and does not pass on address details or bank details to other members.