Interest rates for overdraft loans are very high in Germany. For some experts, this is always a reason for massive criticism of the country’s financial institutions. But before anything changes here, borrowers must first find their own ways to minimize the burdens that arise each month. In particular, rescheduling into a personal loan with significantly lower interest rates can be of great help.
Credit to compensate for the overdraft facility: cost control and less debt rescheduling
It often makes sense to take out a loan to compensate for the overdraft facility. The creditworthiness is a prerequisite for the approval of such a loan. The fact that an overdraft facility was granted is not always sufficient for this. Each house determines which criteria banks apply. This can sometimes result in different decisions. Therefore, you should always apply to several banks. If there are several commitments, you choose the cheapest offer and cancel the other banks. This is possible because so far only the applications have been made and no legally binding contracts have been signed.
Balance credit by overdraft facility: What are the dangers?
If there is already a loan, this should always be included in the application, since the banks will find out about the Credit Bureau information anyway. Perhaps it is also possible to top up this loan. A conversation with the responsible bank can certainly clarify this. A single loan is always better than having to pay off several loans side by side.
There are many offers on the Internet regarding loans that can do without Credit Bureau. Particular caution is required here, since you are often dealing with less reputable providers. Lured with low conditions, you will then quickly be faced with additional costs in the form of insurance and significantly higher interest payments than originally offered.
Balance credit by overdraft facility: How can you minimize the burden?
Perhaps it is possible to compensate part of the overdraft facility yourself. Sometimes relatives or acquaintances can pay part of the amount. The loan payment can be a bit smaller, which will ultimately have a positive impact on the monthly charge. Of course, it can only be decided in individual cases whether this is possible. One thing, however, should be taken into account when rescheduling: If the loan is approved, the discount rate should be set to zero so that new debts cannot arise here.