Many financial institutions reject a loan in principle despite overdraft, as a going beyond the disposition credit negative balance on the current account as a characteristic of unreliable economics applies. However, even with an overdrawn bank account, there are ways to successfully apply for a loan. In the search for the appropriate loan, the differentiation between an actual overdraft and the mere exploitation of the agreed disposition credit, the banks expressly do not consider as overdraft, is extremely important.
What is an overdraft and how does the bank learn about it?
Most bank customers assume that they already take out a loan despite overdraft, if they want to settle a repayment loan with the installment loan. This does not follow the terminology of the banks, according to which an overdraft exists only when the debit balance of a current account is higher than the officially granted disposition. Most banks tolerate overdrawing the credit line for a shorter period of time.
This tolerance depends in part on the duration of the business relationship. If the overdraft continues for several weeks or even months, Girobank will usually ask the account user to clear the account up to the agreed line of credit. In this case, bank customers not only have to apply for an installment loan, but also because of the overdraft. Most commercial banks require the submission of a current account statement when applying for a loan. On the basis of this document, you can see whether the applicant has merely used his disposition credit or actually overdrawn his bank account. They generally reject the application for a loan despite an overdraft in the strict sense, since exceeding the allowable debit balance is an indication of improper account management.
If bank customers wish to apply for a loan despite overdrawing their account, they are best advised to select one of the few banks that does not request a bank statement as evidence of lending. Another possibility, which often promises success, is the submission of the loan application immediately after receipt of the money. On the basis of the bank statements, it is possible to understand whether a checking account was previously overdrawn in the narrower sense.
In some cases, however, the financial institutions only take account of the current account balance, so that borrowing is not a problem if the applicant has not overdrawn his loan on the date of the submitted bank statement. If consumers need a loan despite the overdraft not to balance the bank account, but only for a specific purchase, also the partial payment from the dealer in question. Retailers typically do not require the submission of up-to-date bank statements to enter into an installment payment agreement.
Apply for a private loan on existing overdraft
In contrast to a bank loan, a private loan can be applied for successfully despite an overdraft. The members registered as lenders on the relevant platforms do not strictly adhere to the usual bank credit standards. Rather, they prefer to write credit inquiries that best understand the need to raise money. For this reason, the honest indication of the existing account overdraft in the loan application makes sense.
Many of the private lenders do not see the need for an inquiry drawing in just balancing the disposition credit granted while knowing that the requester will find it difficult to obtain a bank loan in case of an overdraft. Loan seekers Members of online private lending platforms can disclose their financial situation without concern since their personal contact details are not made available to lenders. Rather, they are known only to the platform operator, who also manages the payouts and repayments, as well as the licensed full-rate bank, which legally acts as the official lender. A personal loan can be applied for over the account as well as for a purchase despite the account overdraft.
The appropriate loan with overdrawn bank account
Bank customers can apply for a loan, in spite of an overdraft, both for balancing the bank account and for a specific acquisition. In the second case, the additional balancing of the overdrawn current account through the installment loan offers itself since its interest rates are significantly lower than the overdraft interest. It is also advisable to settle a disposition credit granted by the consumer loan.
A consumer credit is always associated with a fixed repayment plan. However, more and more banks allow their installment credit customers an occasional installment suspension or the modification of the repayment plan in the event of changed financial circumstances. Also useful is the clause in the Loan Agreement, which allows for free special repayments. The central selection criterion for a loan despite overdraft is the lowest possible annual percentage rate.
Nevertheless, a flexible loan may accept a slightly higher interest rate than the cheapest but completely rigid loan offer. Borrowers, despite the overdraft, choose a loan of sufficient duration to actually pay the installments from their current income. A renewed current account overdraft or even the use of the approved repayment credit for loan repayment does not make sense. It can be avoided by opting for the longest possible repayment term and the associated low monthly installments.