A disposition or overdraft facility is a loan granted by the bank. Customers can then overdraw their current account up to a specified maximum amount. How high this is is, among other things, how high the regular payments are and how the Bank information fails.
Further collateral on the part of the borrower is usually not necessary because a lien is agreed between the customer and the bank. If the overdraft facility is not repaid, the bank may, if necessary, resort to other accounts or securities accounts. The collection is usually granted without a formal request. The overdraft facility is also flexible and is primarily intended to help bridge a short-term bottleneck – but interest rates are relatively high. Customers who overdraw the account beyond the MRP limit must pay additional overdraft interest.
What is the cost of the overdraft?
Because banks earn their money with the interest, they naturally have an interest in granting the highest possible overdrafts – up to three monthly salaries are not uncommon. On average, banks demand for the overdraft, according to the journal Finanztest currently interest at the rate of 9.91 percent. Because interest rates are relatively high, banks still earn on overdraft facilities if they are only used by customers for a short time.
Therefore, customers should use the credit line only very briefly and in exceptional cases
The better alternative is to use other financial reserves or take advantage of credit card credit. The reason: Here, the losses or costs are significantly lower. The exact costs can be determined by an overdraft calculator. Here only the respective framework for the overdraft and the interest rate must be entered into the mask. Subsequently, the costs for the overdraft are determined.
A tip: Anyone who has to make use of the overdraft on a regular basis should also think about rescheduling. Because the interest rates for a installment loan are significantly lower.
However, it is positive that savings banks and banks are not allowed to charge any additional processing fees apart from interest. This has already been confirmed by several court decisions, such as the Higher Regional Court of Hamm or the district court of Frankfurt am Main. The reason: further charges are inadmissible, because the customers already pay higher interest anyway.