Is a bank overdraft allowed for all accounts?
Overdrafting an account: what are the consequences?
The most important thing about overdrafts
In this case, the account holder spends more money than he has in bank balance. His account balance slips into the red. So he goes into debt with the bank.
The bank normally only allows this if it has granted its customer an overdraft facility beforehand. You can also tolerate the overdraft.
If you overdraw your account, interest will be payable on that debt. An account overdraft not approved by the bank can lead to an increase in interest rates and, in the worst case, the termination of the account.
If the bank grants you an overdraft facility, you can use this overdraft facility every month. But be careful - regular use can quickly become a debt trap. If you do not have an overdraft facility, it depends on your bank whether and to what extent they tolerate the overdraft.
Overdrafts: Importance and Consequences
Anyone who overdraws their account pays through their account even though they no longer have any bank balance. So he spends more money than he owns and slips into the red. Say: He does Debt at the bank.
Usually this is only possible if the financial institution approves or at least tolerates it. The approved overdraft is nothing other than the overdraft facility.
However, if you overdraw the account, the bank will do this extra interest to calculate. If, on the other hand, they do not agree, you run the risk of the bank receiving your Account blocked. In the worst case scenario, you risk them termination Your bank account and then have to repay the bank debt immediately.
Overdraft with an overdraft facility
If someone has an account with an overdraft facility, they will receive one from their bank every month Credit linethat he can exploit. As soon as the bank customer uses his overdraft facility, his account is overdrawn because he is spending money that he does not have. That way he stays liquid when there is no more creditwhich can be debited from the account.
If you overdraw your account with an overdraft facility, you should bear in mind that the bank wants the money back and for this high interest rates demands. So the bank earns well when bank customers overdraw their accounts.
A requirement for an overdraft facility is usually that a regular monthly income is paid. The amount of the overdraft facility usually also depends on the amount of this income.
How high are the interest rates on an overdraft facility?
With an overdraft facility, you can overdraw your account as many times as you want. Note, however, that you do each time interest numbers, even if You might as a whole only one day in the red were.
The level of interest varies from bank to bank. It is between 6 up to 15 percent interest, with very few financial institutions offering low single-digit interest rates.
A comparison of overdraft facilities with different banks is worthwhile. You should definitely refer to the Amount of the overdraft facility watch out for each time you overdraw your account. With savings banks and Volksbanks, the interest rates are much higher. The following is in relation to Overdraft conditions still to be considered:
- Amount of account management fees
- Amount of credit interest
- Cash Withdrawal Fees
- Additional services free credit card or bonuses
The interest for an overdrawn account with an overdraft facility billed per quarter. After each quarter, the bank will determine the amount of overdraft on your account and calculate the interest based on this.
Unauthorized account overdrawn: what now?
How often you overdraw your account within the overdraft facility usually does not matter to the bank. But what if you do that Overdraw the account beyond the overdraft facility? You should do this for the following reasons avoid:
- In the event of an overdraft beyond the overdraft facility, they will fall again higher interest rates at.
- Your bank may get you ask to balance your account balance.
- If your account does not balance your account, it can cancel. In addition, either the bank or a debt collection company will collect the missing money.
- In the worst case, one follows negative SCHUFA entry.
A short-term overdraft from the account beyond the credit line is possible, but should only be done after Consultation with the bank happen.
Overdrawing an account without overdraft facility: Not recommended due to the risk of being blocked or terminated
Can I also overdraw a normal current account or bank account? Overdrawing an account without an overdraft facility is possible, but should be avoided. For the bank, an overdraft without an overdraft facility is a negative sign.
The bank assumes that you are having financial difficulties and pulls that Consequences from it:
- The bank charges very high interest on overdrafts.
- She will ask you to balance the minus on the account and
- Suspend or terminate your account if you fail to do so.
- Here, too, there is a threat of a negative SCHUFA entry.
But how can I overdraw my account if I have run out of money? Talk to your bankwhether it tolerates a short-term overdraft or gives you an overdraft facility. It may even make more sense to use one instead Installment loan with cheaper interest rates to record.
Flexibility is one of the advantages of the overdraft facility because the decision to overdraw the account can be made at short notice. However, an overdraft facility quickly becomes a thing of the past with long and regular use Debt trap, because the Debts are continuously increasing due to the high interest rates.(70 Ratings, average: 4,09 of 5)
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