Framework credit (call credit): Instead of expensive overdraft facility.
On-demand credit: Buy an expensive overdraft loan cheaply
If money runs out at the end of the month or sooner, bank and savings bank customers will be happy to open their checking accounts. To do this, they use their overdraft facility. At regional banks and savings banks, but also at most supraregional commercial banks with branches on site, the overdraft rates are often ten percent or more.
Most banks grant their customers an overdraft facility of two or three months’ salary. Anyone who does not get by with this credit line and exceeds this limit pays the much more expensive overdraft loan. Interest of 15 percent and more is due here.
Call credit is also called a credit line
Anyone who not only overdraws his checking account from time to time, but constantly, should replace the expensive overdraft facility with a much cheaper external overdraft facility at a direct bank such as Best Lender or Cream Bank.
With our call credit comparison, you can simply surf to one of the cheaper providers and apply for such an external credit line. At Best Lender that goes from 2,500 USD to a maximum of 25,000 USD. Such a loan can also be obtained from Cream Bank from 2,500 to a maximum of 8,000 USD. This direct bank is one of the cheapest providers nationwide.
Repay a call credit flexibly
Compared to the installment loan or car loan with its fixed term and the same monthly rate, you can flexibly repay the framework loan. Most providers require a low monthly minimum repayment. At Cream Bank, for example, it is one percent of the loan taken out each month. Bank 11, which offers customers between 2,000 and 15,000 USD in credit, also requires a minimum repayment of one percent of the loan amount per month for their overdraft facility.
Different loan amounts
A certain loan amount is not mandatory. And you can always pay off. You only pay the interest on the loan. If the bank grants you 10,000 USD, for example, which it transfers to your salary account so that you can settle the overdrafted current account with your bank or savings bank, you first pay the interest on this call credit for this loan amount, as long as you have fully used the credit line, If you then make a repayment of USD 1,000 to the bank in the next month, you only pay the interest for the USD 9,000.
Current account is not a prerequisite for a call credit
The credit line is an external line of credit. Therefore, most direct banks do not expect or require that you open a checking account with them as a salary account.
Some providers such as Bank 11 do not even offer a salary account. It’s very different at Cream Bank or Good Finance. You also do not expect a current account to be opened when you take out a call credit. But maybe you should think about it. Because if you switch to one of these banks and overdraw the account, you pay much less overdraft interest than at most regional banks and savings banks.
Both direct banks have even abolished the higher overdraft rates. You approach the customer who overdrafts the account too often and offer a cheap installment loan, the interest of which is significantly lower than the already relatively cheap overdraft facility.
Call credit: Beware of the interest rate trap
Since the call credit is based on variable interest rates, you should always keep an eye on the market. Because if the market interest rates rise again, this would have a negative impact on the interest on the call credit. If you have overdrawn your overdraft facility at the same time, which is also based on variable interest rates, it can be expensive to borrow money. There is a risk of over-indebtedness.
The most common questions & answers about the framework or on-demand credit
What is a credit line?
A credit line is a cheap alternative to the mostly more expensive overdraft and overdraft loan of a bank or savings bank. With this “external disposition” you can replace the previous one and save a lot of money.
Who gets a call credit?
Individuals over the age of 18 who have a checking account in Germany. And their credit rating is sufficient for this loan.
What is the difference between installment and framework credit?
In the case of installment loans, an agreement is reached with the bank to repay the loan at a fixed interest rate in a fixed term and at the same monthly installments. With the more flexible credit line, you decide from month to month how much you want to repay.
How do I have to repay the call credit?
There are no fixed installments like the installment loan. Either you pay back as much as you want per month (Best Lender). Or the bank expects at least one to two percent of the loan amount per month. For example, you can only pay back ten USD, the entire amount or any amount in between.
How does a credit line work?
You apply for this loan online and state how much money you want to have. The bank checks your creditworthiness. If so, you will be granted the external credit line.
Is the interest on the call credit fixed?
No, it can change at any time.
How much is a credit line granted by the bank?
Depending on the provider, this loan is between 1,000 and 50,000 USD. The amount depends on the individual financial situation. The more you earn, the higher you are given.
How high is the interest on the call credit?
Significantly lower than with almost all overdraft rates, usually below five percent.
Are there any costs for the credit line in addition to the interest?
Are there any risks when taking out call credit?
If you take out a credit line and make full use of it without replacing the previous overdraft facility, you could get into debt.