Often there is still a lot of month left at the end of the money. A fact that only has a limited impact on some people, because they simply resort to the overdraft facility and simply get the money that is still needed for a lively end to the month. But often this calculation is done without the bank. Because this has set up the disposition so that a financial bottleneck can be bridged without much effort. However, it also provided the overdraft facility with a hefty interest rate, which makes it very expensive to use in no time. Because on average, the interest rate for using the overdraft facility is between 10 and 12 percent. Not necessarily little money that has to be paid back to the bank in addition to the borrowed money. Anyone who does not act quickly here and who uses debt rescheduling to replace the debt with the bank will find themselves in the debt trap more quickly than is desired.
What distinguishes the overdraft facility?
The overdraft facility, popularly known as overdraft facility, is linked to the current account and is usually granted directly when the account is opened. It is a commitment loan for which interest accrues only when it is used. The interest only accrues for the sum that was taken from the overdraft facility. There is no provision fee.
Since the use of the overdraft facility is very expensive, this type of loan is only suitable for a short time. A disposition should therefore never be taken lightly, but only Loan tips when this is really necessary. In order not to end up in the debt trap, experts recommend rescheduling the overdraft facility if you use it for a long time. Debt rescheduling is easily possible with the help of an installment loan.
Find the right installment loan for a debt rescheduling
The installment loan is the simplest option for debt rescheduling. It is easy to borrow and is associated with a very low effective interest rate for smaller amounts. With a good credit rating, the interest rate is barely 3 percent. Depending on which bank the loan is drawn on.
Before the installment loan can be taken out, the amount of the debt on the overdraft facility must be calculated. Since the amount of the installment loan can be freely designed, it is possible to include exactly the amount that is needed. So there is no debt left, nor is there too much money to be raised, which may then be spent lightly on other unimportant things.
We recommend that you do not take out the installment loan for the debt rescheduling from the house bank that offers the overdraft facility. It is unlikely that it will make a good loan offer as it has little interest in the overdraft being rescheduled. After all, the bank makes good money using the loan. Why should she agree to a replacement?
What are the benefits of debt restructuring?
The debt rescheduling of the overdraft facility has various advantages that are not only found in the savings. Anyone who has not exhausted the overdraft facility can use it again and again when financially needed. After the debt rescheduling, it can therefore be regarded as an emergency anchor again and can generate short-term liquidity.
In addition, a balanced account gives a better reputation with the house bank. If this sees that the account holder permanently overdrafts the account and has hardly any possibilities to balance it, the bank will have difficulty granting loans, increasing the overdraft facility or agreeing to issue a credit card. All of these things require a certain amount of liquidity, which can be optimally presented with a balanced current account. Balancing the overdraft facility therefore brings with it a wide variety of advantages that cannot be dismissed out of hand and that make life a lot easier and more carefree.