Additional overdraft facility? Instructions!
Do you need additional money because you want to replace an expensive loan, or you are stuck in a financially tense situation or a lucrative buying opportunity has appeared? The reasons can vary … and they will not be evaluated here.
Here we will show you how you can have permanently more money at your disposal through an additional overdraft facility – no matter how you want to use it. The knowledge to a greater financial flexibility will be revealed here.
… up to 10 times the monthly household income!
You can find the instructions on how to set up the additional overdraft facility in the second part of this page.
1. Important background knowledge
Overdraft facility of the current account
Usually, one can find the overdraft facility (Dispositionskredit) as a supplement to a Current Account (Girokonto). It enables the overdrawing (Überziehen) of the account. If one is short on cash, one does not have to directly apply for a loan. One simply slip with the current account into the red and in the best case, one settles it again with the next salary payment.
Once established, the overdraft facility saves a lot of work and trouble for the customer and the bank (such as direct debits that are transferred back at a lack of funds – or if the account is empty – and leads to further problems). Additionally, the bank earns quite good from the overdraft interest.
An overdraft facility is usually granted in the 3 times amount of the usual monthly cash flow or salary payment (Gehaltseingang). An additional overdraft facility, as presented on this page, may be up to 10 times the total household income (Haushaltseinkommen)!
Additional overdraft facility through a special bank
Besides the full-service banks at which one obtains everything from the securities account to the current accounts up to loans, there are banks that have specialized on only a few or even just one product type. Therefore, it is obvious that such specialized banks are particularly good in what they do.
extra bank for an extra overdraft facility
In Part 2, I have determined some good banks for you that have specialized in providing people with a second overdraft facility. This type of loan still does not have a unified name – out of this reason, there are several terms, some are product names, but they always mean the same thing.
Different terms for an additional overdraft facility
The combination of the terms “Abrufkredit” (call credit) and “Rahmenkredit” (global credit) describes the functionality of this special loan type quite well …
… so funktioniert dieser Kredit:
- You have a loan account at a special bank.
- During the account setup, a limit has been agreed, of how far the account can slip into the red (keyword: global credit / Rahmenkredit).
- Whenever you want, you can get money from this account by calling the bank or logging into the online menu and arrange a transfer to your current account (keyword: call credit / Abrufkredit).
- You can do this as often and as long as the maximum credit line has been exhausted.
- To save on lending rates, you can transfer money to the credit account anytime you want.
- You can repay the loan in one fell swoop.
- If the balance of the credit account is zero, the account does not cost anything. No interest, no fees. Simply free.
Such a credit account can be set up as a precaution, as it is completely free. Only for the period of time, in which one withdraws money, one has to pay interest.
Every mentioned credit bank in Part 2 to not charge any processing fee (Bearbeitungsgebühr) and no account management fees (Kontoführungsgebühren). Therefore, the additional overdraft facility is completely free of charge in times when it is not needed.
Alternative to the savings for a rainy day
One can get this additional credit line as a precaution in order to have greater financial leeway, if one needs money fast. Especially in times of low interest rates, where saving money in a savings account hardly pays off, it is an excellent alternative to dispose of a call credit or global credit.
Instant credit payment required?
If the payment of the loan is urgent, then state the desired amount to be paid to your current account when applying. The loan bank will be pleased, because it only earns when you use the overdraft facility.
2. How to get your additional credit
Requirements for a successful application
Does this apply to you? Then the question arises, which provider would you choose for your new overdraft facility. It is advisable to apply for the account only at one provider at a time and at several simultaneously, because each bank makes a Schufa inquiry (credit investigation company) and they can see a period of 10 days, in which other banks have also queried the creditworthiness and why …
If it should not work out with the first provider, then wait two weeks and try with another one.
Good providers of additional credit lines
In Germany, there are several domestic and foreign banks that provide overdraft facilities. I have determined three German banks as providers, because I have my own experiences with these banks since years and I can recommend them having a good conscience.
Allgemeine Beamten Kasse
|Special feature||particularly easy for public service workers||further bank services, such as current account and cards possible|
|Interest rate||see offer through the direct link to the bank in the following line|
Tip: How to obtain a higher credit line
You achieve a higher financial scope, if you add a second person to the loan application. Moreover, the creditworthiness increases, thus the likelihood of the loan approval too.
At the Volkswagenbank, one can even add up to two guarantors (Bürgen). This makes sense, if you do not have a high income in Germany yet or if there is only little data to determine your creditworthiness. However – and every guarantor should have this in mind – he/she is obliged to pay the loan, if the actual borrower fails to pay.
Payment of the loan amount (Example: VW Bank)
You can see how easy it is to use the additional overdraft facility with the example of the Volkswagenbank:
Logging into the online banking and launching the form “Buchung” (booking)
Advantages of an additional overdraft facility:
- Increasing the financial scope
- Deposits and withdrawals are possible anytime
- Independent from your main bank
- relatively low interest
- free in periods when it is not used
- Account opening free of charge
i have been reading most of your post, but i dont know if you can help me in my situation with an advise. I am new in germany for like 8 months now, and i need a shot loan of around 1500-2500 euros, but i dont know how to go about it. I have a student job that i get paid around 600 euros monthly but when i try some places they reject me.
do you have any advise
As a web-portal we cannot offer any individual advice on this matter, sorry. What we know, we publish here in our articles. Anyone who wants to know more is welcome to contact/consult with the finance institutes that offer loans, or alternatively with loan brokers.
I just have one question regarding Rahmenkredit.
Let’s say with ING DiBa with the interest rate the monthly interest which I have to pay is 4.86 Euro for 1000 Euros.
What if I am paying back the 1000 Euros in 10 days.. will the 4.86 (which is qctually for 1 month = 30 days) be reduced based on a average balance in a month?
Interest is only incurred for the first 10 days. A very clean and fair interest calculation 🙂
Thank you.. really a good work. Helps us a lot.
Thanks and keep doing 🙂
My best wishes 🙂
I have just one question. Do you have to keep on applying for an overdraft every time you need to or is it enough to just apply once and then it becomes fixed incase of the next time?
One email suffices.