Take a loan instead of overdraft facility

Rescheduling expensive overdraft facilities

Overdraft facilities are not uncommon. Many people take the opportunity to overdraw their accounts. The reason for this can be completely different. For example, an unexpected investment means that monthly income is insufficient. This can be a repair on the car, an increased additional payment or the purchase of a new household appliance. However, there is an unpleasant surprise when the overdraft facility is settled. The interest for overdrawing the account is usually extremely high.

Consequences of high interest rates on an overdraft facility

Overdraft facilities offer a significant advantage at unexpected costs, but can quickly develop into a vicious circle. The option to spend more money than you actually have is advantageous. However, caution is required. The overdraft facility should really only be used in urgent cases. Due to high interest rates, debtors can quickly end up in a debt spiral. The monthly income is significantly reduced by the high interest rates. It is therefore advisable to think about a loan.

Credit instead of overdraft

Anyone going through a difficult financial phase and regularly using their overdraft facility should take advantage of a conventional loan. A loan is characterized by low interest rates compared to a overdraft facility. Because of this feature, more and more people are compensating their disposition with a loan. However, it is advisable to think about a loan before the overdraft facility is exhausted.

This avoids expensive interest payments and borrowers can do more with their money despite paying in installments.

In addition, the debts are paid off in a predetermined time. A loan avoids a spiral of debt due to high interest rates.

Recommendation on an installment loan

A normal installment loan is recommended to compensate for your own overdraft facility. This is characterized by low interest rates. In addition, the loan amount can be optimally adjusted to the debt from the overdraft facility. The loan amount is thus adjusted to the financial situation.

Align contract terms as desired

In addition to low interest rates, applicants for an installment loan also benefit from variable interest rates. Depending on the financial situation, the contract term can be determined, for example. The longer the term, the smaller the installments to be paid and thus the monthly charges.

Find the right lender

Borrowers can also find the most popular way to apply for a loan from their own bank online. The cheapest loans are compared in a very short time using a comparison calculator. In addition, borrowers can enter their desired contract term when entering the loan amount or determine the amount of the installments. A comparison with the loan offer of the in-house bank can definitely be worthwhile.

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