Framework loans as a collection alternative.

 

The discretionary credit

The discretionary credit

It is one of the most popular loans of the Germans: Once granted, it offers the possibility at any time and without an audition at the bank to bridge bottlenecks.

The maximum is the flexibility: Disposition loans are not equipped with a specific repayment date. Rather, the bank only books the interest on the utilized framework. But these have it all in itself. According to the MFE financial advice costs the dispoarding at German banks on average 11.75 percent interest a year.

Given the very low level of interest rates, this is a considerable amount that can lead to very substantial costs. Anyone who maintains an average negative balance of 3000 usd in his account pays more than 350 usd in interest a year. Beneficiaries are so-called framework loans, which correspond to the Dispo or very similar, but are equipped with a much lower interest rate. The loans are revolving credit lines, where either only the accrued interest has to be paid or, as in the case of the accounts, between two and five per cent of the utilized credit line has to be paid on a monthly basis. If desired, however, the loan can be repaid at any time. The framework credit is usually provided by bank transfer to the current account at the house bank.

Some institutions also make the loan directly available through the account,

Some institutions also make the loan directly available through the account,

It can also be used with a debit or credit card when shopping or by cash. Framework loans are not widely used in Germany not least because of this there is no reliable source for the average interest rate. That this is clearly below that of the classic Dispos, however, is undisputed. For example, Metabank requires slightly more than 7.0 percent interest, while Comie Europe Bank charges 8.9 percent.

At Amphibank, 8.49 percent are satisfied. Anyone who regularly stays in the shoals of his disposition credit should consider rescheduling with a credit line. The frames are set up starting at 2,500 usd and can amount to up to 25,000 usd (as of June 2009).