So you get a loan despite overdraft
In many cases, taking out a loan despite overdraft is not a major problem. Since the interest rate on an overdraft facility is often very high and is often between 10 and 17%, it is usually worth considering an installment loan as an alternative.
In order to be able to take out a loan despite overdraft facilities, the same requirements must be met as for any other installment or consumer loan.
First and foremost, this includes proper credit information, but also regular income, which ideally should come from working as an employee or civil servant. However, most people who are interested in a loan despite the overdraft facility will be able to meet these requirements without any problems, because otherwise they would not have received a overdraft facility. It is set up individually for each bank customer and is usually two to three times the regular monthly income.
Installment loan as an alternative to overdraft facility
A disposition is particularly suitable for bridging short-term financial bottlenecks. However, it is less suitable for larger purchases or a longer holiday trip. There would always be a risk that the account would remain permanently in the debit despite the regular incoming payments, which would then lead to considerable additional costs in the form of high debit interest. To avoid this, it is worth thinking about a loan despite overdraft as an alternative at the latest when the account has been in the red for a long time.
Such a loan can be taken out both at the house bank and at another bank or savings bank. This will usually be an installment loan. This installment loan would have the advantage that the debit interest is significantly lower than with a overdraft facility and that it can also make a decisive contribution to bringing the account back into positive territory. However, the approval of an installment loan to offset the overdraft facility usually has the consequence that the overdraft facility is either reduced or even canceled.
Installment loan in addition to the overdraft facility
If the income is sufficiently high and the credit information is in order, there would also be the option of taking out an additional loan despite the overdraft facility.
In this way, the borrower could create new financial scope. However, it should always be borne in mind that the credit installments for the loan must be paid regularly despite the overdraft facility and that the overdraft facility should also be balanced at the same time.