With a disposition credit, which is also known to many as an overdraft facility or, in short, a disposition, the account-managing bank grants the customer a credit line in connection with the management of the checking account. This credit line may be used by the customer as required. An overdraft facility is intended to bridge short-term financial bottlenecks. It is not a loan that is suitable for major purchases and certainly not to cover the running costs of living.
Who will be set up a disposition credit
Disposition loans are now generally relatively generous, and often without the fact that the customer must apply for it extra, with regular salary received automatically. With the dispensary, which, if used regularly, is a fairly expensive loan, the banks earn a lot of money without much effort. With regular salary or other income of a regular nature, such as a pension and a faultless Schufa information, it is not a problem to be granted a discretionary loan from his bank.
How high the credit line is then determined by the income. Two or three net monthly salaries or pensions are usual. Customers who have been with the bank for a long time and may have credit balances on other accounts also get a significantly higher credit line if they wish. Further collateral does not demand the bank. Usually the disposition credit is established indefinitely. The amount of interest is variable. Theoretically, they can change daily according to the conditions on the financial market.
Dangers for consumers when using the Dispos
Anyone who uses his discretionary credit constantly, partly disputes the cost of living and makes regular purchases, not only has to reckon with high costs for the accrued interest, but also runs the risk that the dispo can never be compensated. This is what consumers call colloquial dispo trays. In addition, the bank will then have the right to terminate the system without notice if the credit line is regularly overdrawn or to reduce the credit line if the income changes.
In this case, the bank will pay the debit amount immediately. If the account holder can not compensate the dispo, it may threaten to terminate the current account, which then entails a negative Schufa information.
Use the Dispo correctly
The dispo should always be used only if short-term liquidity bottlenecks are to be bridged. For example, if the repair of the car is more expensive than expected. A down payment is due on the booked holiday trip, and the holiday pay is paid in two months or pay an invoice is urgently pay.
A rule of thumb is that the discretionary credit is always the right choice if a customer is able to rebalance the account within three months.
Interest for the Dispo
Each account holder using his / her Dispo is obliged to pay interest to the Bank. The interest rates for disposition loans are extremely high for some banks, which consumer advocates regularly criticize so far unsuccessfully. Once a quarter, the customer gets the interest charged.
If the repayment credit is used regularly, it may make sense to change the bank if the discretionary interest is too high. There are providers that charge just under eight percent, which is relatively cheap and there are banks that charge their customers 13 percent interest or more.
Anyone who as an account holder constantly uses his dispoise and can not manage to repatriate it for many months should, as an alternative, think about an installment loan in order to make up for the MRP. If at the same time credit is available on a call money account, this balance should be cleared for the dispatching. Credit interest is always lower than debit interest, so the bottom line, the balance of the balance is more appropriate.
The exaggerated dispatching becomes really expensive
Anyone who has to cover the credit line granted to him by the bank should inform the bank accordingly. However, authorized and unauthorized overdrafts of the credit line are really expensive and, in individual cases, may also lead to the cancellation of the loan or current account if the account is not cleared.
Alternatives to the dispo
A good alternative are call-off loans, which unfortunately are not available at many providers yet. Call-off loans are also credit facilities with a corresponding credit line, but these are not linked to the management of the current account at the bank. The interest rates for call-off loans are significantly lower, so that savings can be made with regular use.