Overdraft of Sberbank and BPS on credit and debit cards. BPS Sberbank - credit cards with overdraft Overdrive at BPS Bank

Almost every person has faced the problem of not having enough money to make a purchase. In such a situation, you can ask for a loan from friends, relatives, or borrow money from the bank for a very short period.

Definition

An overdraft is a loan issued by a bank to replenish an individual’s account. Its main difference from a consumer loan is that it can be renewed multiple times during the term of the contract. In addition, the loan must be repaid at least once a month, and interest is calculated on the entire amount of the debt.

What does a potential borrower need to know?

An overdraft is a revolving line of credit. Provided that the debt is repaid on time, the funds can be used an unlimited number of times. This is very convenient for clients who value their time and cannot apply for a new loan every time.

Such a loan costs much less than “payday money”, which is provided today by microfinance organizations.

The interest rate in all banks is floating. It depends on the client's income level.

Overdraft can be not only officially issued, but also technical. In the second case, a negative account balance may occur after converting funds or withdrawing cash from an ATM with a large commission amount. In the event of a technical overdraft, the bank provides 35 days to repay the debt. Otherwise, penalties will be applied to the client.

In case of untimely receipt of income on the card for any reason, sanctions will be applied to the client in the form of an increase in commission or a decrease in the limit.

Lending institutions also charge fees for withdrawing funds from any ATM.

For some time now, it has become a practice to sell an overdraft at the same time as registration. This may come as a big surprise to many quitting employees. Indeed, in case of delay in transferring income, penalties will be applied to the client.

Peculiarities

Overdraft is issued only to existing clients credit institution. Funds are transferred to an open account. Most often, a salary card is used for this purpose. This account is replenished twice a month, and funds can be used an unlimited number of times. The funds limit is set by the bank based on the client’s income level. If own funds there is not enough money on the card to make a purchase, the overdraft service is automatically activated. That is, the client will be able to pay for the purchase with his salary card, but at the expense of borrowed funds.

An overdraft is the same loan on which interest is charged. That is, the client will still have to return the principal amount and accrued commission to the bank. Unlike a regular loan, the loan is repaid immediately after funds are transferred to the account, and a commission is charged on the amount of money used. If, for example, a client received a loan in the amount of 100,000 BYN, but used only 10,000 BYN, then interest will only accrue on this amount until the debt is repaid.

Today we’ll talk about how to get an overdraft at Belarusbank.

How to apply?

An application for an overdraft from Belarusbank can be submitted directly on the credit institution’s website in the section of the same name. To fill out an application for a loan through Internet banking, just go to the “Additional services” section of the “Accounts” menu. In M-banking, the corresponding menu item is located in the “Services” section. You can also submit an application by contacting one of the branches of OJSC Belarusbank.

Overdraft on salary card provided based on the calculated limit. The latter depends on the level of monthly income and cannot exceed 200 basic units. The completed application goes to the credit department of the bank at the place where the account (card) was opened.

Employees of the same department will inform the client about the results of the preliminary decision via SMS or in any other way chosen by him. If the application is approved, the client will be invited to the office to provide the originals of the submitted documents and sign the contract.

Belarusbank issues an overdraft if you have a passport and a certificate of income for the last two quarters.

Conditions

OJSC Belarusbank provides loans for salary cards under two programs, which differ in limits, terms and fees:

1. Maturity once per quarter. Overdraft "Belarusbank" provides for a year in the amount of twice the monthly income for the last six months. Interest rate = SR + 9 p.p. (as of 11/01/16- 29%). The validity period of the loan cannot exceed the validity period of the card accounts.

2. With a repayment period of once every six months. Overdraft "Belarusbank" provides for a year in the amount of 400% of the monthly average income for the last six months. Interest rate = SR + 10 p.p. (as of 11/01/16- thirty%). The validity period of the loan cannot exceed the validity period of the card accounts. This service is not provided to clients whose work experience was less than 1 year at their last place of work.

Previously existing program with monthly redemptions were closed from 08/01/16.

Potential borrowers must meet the following requirements:

• be listed as individuals or individual entrepreneurs;
• have an impeccable credit history in the past;
• have a bank account through which transactions have been carried out over the past three months.

How to use Belarusbank overdraft?

Having issued this service, the client will be able to pay bills with borrowed funds from his card. The plastic holder himself determines when, in what volume and on what to spend the overdraft. Belarusbank charges interest only on the actual amount of debt. If a client has signed up for a service but does not use it, then he will not pay a commission. Overdraft is activated automatically when the client pays an invoice whose amount exceeds the balance of his own funds. Loan repayment is also carried out automatically after income is credited to the account.

Credit vs Overdraft

At its core, an overdraft is very similar to a consumer loan, which is provided on cards. The loan amount in both cases depends on the salary level. However, the maximum loan amount is higher than for an overdraft from Belarusbank. Interest on cash withdrawals from the account is 4%. The rates for using funds are the same in both cases. However, when applying for a loan, interest is charged on the entire amount of the outstanding debt. No collateral or guarantee is required to apply for an overdraft at Belarusbank.

Customer Reviews

The main advantage is ease of use. To apply for a loan, simply submit an application online. If the client already has a salary card, then there is no need to provide a certificate of income. After preliminary confirmation of the application, the bank manager will contact the client to set a time and place for a meeting with a branch employee. Already at the office of the credit institution, the client will be given a loan agreement for signature. After this, you can use the overdraft an unlimited number of times.

Debt repayment is carried out automatically after replenishing the account. On the one hand, the client does not have to look for an ATM or terminal for payment next installment. On the other hand, in case of overdue debt, the account will be blocked until full repayment loan. In addition, the bank may apply other penalties in the form of lowering the limit and increasing the rate. The disadvantages of an overdraft also include a small credit limit and short time validity of the contract (from 3 to 12 months).

Other options

Having examined in detail the conditions under which you can apply for card loans at Belarusbank, we will study other offers.

Market rates for servicing such loans range from 33-48%. At the same time, clients have to pay 34-42% for a consumer loan.

Most low rate Bank BelVED offers on the market. The “Spare Pennies” loan has a commission of 33%. For using a similar product, clients of Fransabank and Zepter Bank pay 39%, Technobank and Priorbank - 40%, BNB-Bank, Bank Moscow - 42%. Overdraft is the most expensive for VTB Bank clients - 47%. At the same time, many financial institutions provide a grace period of 10-30 calendar days, during which interest on the loan is accrued at a rate of 0.0001%.

Free withdrawal of funds from the account is provided only with MTBank, RRB-Bank, and Bank Moscow cards. A similar operation in Zepter Bank is charged at a rate of 2.5%, in Technobank - 3-5%, depending on the tariff plan.

Alfa-Bank provides a similar service only to salary card holders. The limit amount is 300% of the average monthly income. The interest rate increases with the length of the loan. When withdrawing funds from the account, a 2% commission is charged.

« Belagroprombank» also offers its clients two programs to choose from. For the first 90 days from the date of signing the agreement, overdraft is provided at 10% per annum. From 91 days the rate of 13% begins to apply. Exceptions include participants salary project and employees of agricultural enterprises. Overdraft is provided to such clients at 12.5% ​​per annum. Initial amount the loan is limited to BYN 5,000, and the maximum is 200,000 BYN. The application is reviewed within two days. Funds are transferred to the card that monthly income is received: salary, profit from entrepreneurial activity, pension.

"Belarusbank" provides credits to cards based on income level, but at "BSP-Sberbank" the first overdraft can be obtained for maximum amount 10,000 BYN at 16%. The application is reviewed within two working days. You can repay the loan within a year from the date of debt formation. Not only citizens of the Republic of Belarus, but also stateless persons who have a permanent source of income can receive an overdraft.

Conclusion

Overdraft is good way get borrowed funds in an emergency situation, but you need to use this service very carefully. It's even better to activate it only when absolutely necessary. Overdraft is addictive. First, the client takes out borrowed funds “for important needs,” but after a couple of months he can no longer stop, since the limit amount is constantly increasing, and the proceeds are not enough to fully repay the debt.

Overdraft loan

The word “overdraft” itself comes from the English overdraft (over – “over”, draft – payment order) and roughly translates to "overdraft" or, more precisely, "payment order for an amount exceeding the account balance." In the practice of domestic banks, overdraft is considered as negative balance(balance) on the account. This can be any bank account, not necessarily associated with a bank card (card account).

Overdraft can be permitted or unauthorized (technical). In the first case, its size (limit) is set in advance by the bank, based on the account turnover, the average monthly income of the account holder or the client’s solvency. In the second case, overdraft occurs as a result financial transactions on the account, for example, due to exchange rate differences on the date of the currency exchange transaction and on the date of its reflection on the account or due to a temporary delay in write-off commission for completing the transaction.

Overdraft credit is quite widely practiced by legal entities when making payments to suppliers (contractors) or paying wages to employees. This type of loan allows you to fill the temporary shortage of free Money and meet deadlines for obligations.

In this article, we are more interested in an overdraft loan to an individual – the holder of a bank account. plastic card. Let us immediately make a reservation that we will be talking about debit cards, since credit card transactions are carried out within the limits of exclusively borrowed funds within consumer loan.

“Salary” card is the most common type debit card in our country (over 90% of all cards issued in circulation). This type also includes cards for receiving scholarships in educational institutions.

At the same time, a number of banks offer to obtain an overdraft loan using a regular debit card that is not related to the salary project. Typically, this will require security in the form of a surety bond or a security deposit, but more acceptable forms of security may be provided, such as penalties in case of late payment. Among Belarusian banks, an overdraft loan on such conditions is issued by Fransabank OJSC.

Among common features overdraft loans for holders bank cards The following points can be distinguished:

1. Reflection on the card account.

The overdraft limit is reflected on the card account as an increase in the amount of own funds available for use.

Example:

If you have your own funds in the amount of 500,000 rubles on your card account, then after applying for an overdraft loan with a limit of 1,000,000 rubles. your card account balance will increase to RUB 1,500,000. In this case, up to the balance of 1,000,000 rubles. you can use your own funds, and if the balance is less than RUB 1,000,000. – borrowed funds through an overdraft loan.

An ATM, a cashier in a store or a cafe will not know which part of the funds used is your own and which part was issued on credit by the bank.

2. Renewability.

During the term of the overdraft loan, the overdraft limit is restored each time to the amount of the repaid debt. In practice, this means that once you have repaid the loan, you are free to use it again.

3. Limited limit and repayment period.

Unlike a consumer loan, the overdraft limit is limited, as a rule, by the average monthly income of the card account holder. A number of banks offer the possibility of obtaining an overdraft loan with a higher overdraft limit. For example, an overdraft loan at BPS-Bank OJSC, Fransabank OJSC can be issued with a limit of up to four average monthly income. The repayment period of an overdraft loan is also short and ranges from 1 to 12 months, depending on the bank and type of loan.

As we have already mentioned, to receive an overdraft loan you need to be a holder of a debit card. bank card. In addition, it is necessary to keep in mind that some banks provide overdraft loans only to holders of “salary” cards.

So, what documents are needed to obtain an overdraft loan?

Firstly, the bank needs proof of your income. If you are already a card holder, the bank can independently obtain information about turnover on the card account. If you apply for an overdraft loan when opening a card account, you will need to first request from your employer a certificate of income for the last few months, usually from 3 to 6 depending on the bank.

Secondly, if a guarantee is provided as collateral for the loan, then the same certificate of income from the guarantor’s place of work will be required.

Depending on the procedure established by the bank, you may need to fill out an application for an overdraft loan.

If the bank's decision is positive, a card account agreement is drawn up with the provision of an overdraft loan or a corresponding additional agreement to the card account agreement. The guarantee is formalized by a guarantee agreement, which is signed between the bank and the guarantor.

The term for providing an overdraft loan can be equal to the repayment period or the validity period of the card. The card account agreement may provide for an automatic extension (extension) of the term for providing an overdraft loan if all terms of the agreement are met.

After the bank processes an application for an overdraft loan, the balance of available funds on the card account increases by the amount of the overdraft limit.

If you have salary card, then the next time your salary is credited, the overdraft will be repaid automatically. But in the case of a personal debit card, you need to independently monitor the repayment period of the debt so that at the end of the loan period you do not have to repay the entire amount.

1. Top up your card account using a card.

In cash at a terminal installed at a cash point (CAP), by entering a PIN code;
- instant transfer money from another card using RBS channels (info kiosk, Internet banking).

2. Top up your card account without using a card.

By bank transfer from the employer as part of a salary project;
- in cash at the bank's cash desk using a receipt order (you must indicate the card account number);
- Bank transaction from another bank or another branch of the issuing bank (you must indicate the card account number and Bank details).

Everyone has a situation when there are still a few days left before salary, but money is needed today. In such cases, an overdraft loan comes in handy. But many people confuse the increase in the balance on the card account after receiving a loan with the next salary receipt. We must always remember that we receive other people’s money on credit and only for a while, but we will have to give ours away forever.

The main rule of the one who took advantage overdraft loan, - self-discipline. I really want to use all the available money! But the fate of such a card holder is to sit in a constant “minus”. After all, repaying an overdraft loan means “increasing” the account balance to an amount exceeding the overdraft limit.

Example:

Alexey took out an overdraft loan from the bank with an overdraft limit of 2 million rubles. His own funds at that time amounted to 150 thousand rubles. After visiting the bank - lo and behold! – the balance on the card account increased to RUB 2,150,000. On the same day Alexey went to the salon mobile communications to buy a new communicator for RUB 2,050,000. Having paid for the purchase by card, the balance on the card account was reduced to 100 thousand, and Alexey entered an overdraft of 1,900,000 rubles. “There’s nothing to worry about!” thought Alexey, “I’ll get an advance payment soon, and I’ll pay off the overdraft with it.”

Option 1. If you don't worry.

Indeed, after crediting an advance in the amount of 1 million rubles, the balance was 1,100,000, and the overdraft was reduced to 900,000 rubles. But before the next payment, Alexey, without hesitation, spent the entire amount received. As a result, the overdraft increased to the previous 1,900,000 rubles.

At the beginning of the next month, Alexey received another payment, from which the bank withheld interest for using an overdraft loan in previous month. The situation was repeated from month to month: on the day of payment the overdraft decreased, but by the next day it managed to grow again, while interest for using the overdraft was withheld from each month. For Alexey, the overdraft has become “eternal”.

It's not hard to guess why this happened. Having taken money for the purchase on credit, Alexey continued to live in his usual rhythm, not caring that the overdraft itself would not decrease.

Option 2. How to repay an overdraft loan correctly

Finally, Alexey understood a simple truth: in order to get out of an overdraft, you need to leave a certain amount from each payment to pay it off. Received 1 million rubles in advance - spend only 800 thousand. Of course, you can spend everything, but it’s better to show willpower and next payment have 200 thousand more in your account than last month, thereby bringing the desired “exit from the minus” closer.

What other options are there?

In order to somehow help “undisciplined” customers, some banks offer the opportunity to repay an overdraft loan on a schedule so that the allowed overdraft limit decreases by a certain amount every month.

Despite the “insidious nature” of an overdraft loan, having the opportunity to “go into the red” for a short period of time at any time is good, because emergency situations happen in life. An overdraft loan is often provided without a guarantee, is issued quickly and is indispensable as a method of short-term lending for small amounts.

What if you want to take out a “serious” loan for more long term? For example, to renovate an apartment or buy a car. In this case, a credit card will come in handy. About the features of obtaining and using credit cards points we'll talk next time.

Maxim Demchenko

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Belarusian Bank BPS Sberbank offers clients an overdraft service, which allows them to use borrowed funds in excess of the amount available in the account. Short-term negative balance is allowed. When money is received on the card, the debt is automatically repaid. BPS Bank charges interest on the overdraft on the amount actually used.

BPS Bank issues plastic payment card to individuals receiving salaries into an open personal account, with an open credit service overdraft Wherein available amount varies depending on the period of full repayment of the loan.

Interest rates on overdraft loans are linked to data from the National Bank of the Republic of Belarus (NBRB) and change accordingly. From June 27, 2018, the National Bank refinancing rate is 10% per annum. Currency unit- only Belarusian ruble. The installment plan for the resulting debt should not exceed a calendar year.

Basic requirements for the borrower

Potential overdraft recipients at BPS Bank are subject to the following minimum requirements:

• age from 18 to 65 years;
• work experience at the last place of work for at least 3 months.

Users can apply for a loan online. At the same time, they need to indicate their personal data (last name and first name), mobile phone number for communication and consent to the automatic processing of personal data by the bank.

To get an overdraft it is enough:

• apply online;
• wait for the bank's prior approval;
• come to the nearest branch and arrange the service.

By loan calculator you can calculate the amount of overpayment.

The payment method (accrual of interest on the balance or payment of debt in equal payments) is chosen by the client independently.

What documents should be provided

To apply for a loan, you must provide originals and copies of the following documents:

1. An identification document of the borrower (for citizens of the Republic of Belarus a valid passport, for foreigners or stateless persons a document confirming a residence permit in the country is required).
2. For men aged 18 to 27 years, a military ID or a document confirming a deferment from conscription is required.
3. Certificate of residence or temporary stay in the Republic of Belarus.
4. Certificate of the Federal Social Protection Fund form about the state pension accrual for the previous month.
5. Documents confirming additional income applicant (for example, a certificate of the amount of pension payments).

At credit limit up to 5000 Belarusian rubles an individual requires one guarantor; if the loan size increases to 10 thousand, several guarantors are needed.

Registration of a loan agreement

Online application

To get advice on drawing up an agreement online, the borrower is recommended to follow the link on the official website of BPS Bank.

The application is reviewed within 2 days.

In the application, the user must indicate:

• your personal data;
• number mobile phone for contact;
• convenient time to answer a call from a bank manager.

The consultant contacts the applicant at specified deadlines. After approval, the borrower needs to go to the nearest bank branch, the address and opening hours of which are indicated on the official website. Should bring required package documents.

Personal visit to a bank branch

You can apply for an overdraft at BPS Bank by visiting in person:

• present the required documents;
• leave your contact information.

Decor loan agreement takes about 10 days.

Clients can find a list of bank branches on the official website.

Application by phone

You can obtain the information you are interested in by calling:

• by short number 148 or 5-148-148, payment is made in accordance with the tariff mobile operator, you can apply for a loan;
• the operator helps you fill out the online form;
• the client is informed necessary list documents that must be presented in person at the bank branch.

An analysis of a client’s solvency when applying for an amount of up to 100 million Belarusian rubles is carried out automatically without the participation of the human factor under the “Credit Factory” program. As a result, the issuance of a positive decision on the provision of an overdraft loan is accelerated. For payment card holders, the result is reported after 2 hours, others wait 2 days for a decision.

If the loan amount is limited to 1 million BYN, as well as for salary card holders, automatic technology is not used.

An overdraft loan is called a “payday” loan, helping to solve urgent financial difficulties. Minimum documents, accessibility of registration, fast delivery time credit funds– the main advantages of a loan from BPS Bank.

Hello, friends!

We continue to improve our financial literacy and at the same time improve your English. Today the foreign term “overdraft” is next in line. Let's find out its meaning, learn to understand and not be afraid.

The number of bank card users is growing every year. Among them are students, pensioners, and even children. Why? It's convenient, practical and safe compared to a wad of money or a mountain of coins in your wallet. We are increasingly using bank cards to receive earned money, make transfers, withdraw cash and pay for goods and services in stores and on the Internet.

Banks are trying to support our desire to use credit cards. After all, paying customers are main source profits and the meaning of existence of the financial and credit organization itself. Banks compete with each other, luring us with new banking products and make offers that are hard to refuse.

We have already dealt with the concept, types and conditions of using debit and credit cards. We learned what, for example, cashback and overdraft are. It is the latter that I want to dwell on in more detail today. Not everyone likes to use credit, but not everyone suspects that they can become a debtor to the bank even without borrowed money. How is this possible? Let's figure it out.

What does the term “overdraft” mean?

The foreign word “overdraft” translated from English means “overspending”, “excess of credit”. We see the familiar word credit, so we think that it applies only to those who like to live on credit. This is not entirely true. An ardent opponent of other people's money can also encounter an overdraft. Reading reviews from bank card holders, I was convinced of this. But first things first.

Overdraft is short term loan which is provided by the bank under the agreement bank account card holders (usually salary cards). For example, when you do not have enough personal funds to purchase any goods, the bank will be happy to provide the missing amount. But under certain conditions, of course.

Civil Code Russian Federation(Article 850) indicates that if a bank makes payments from a client’s account when there is no money on it, then it thereby gives him a loan with all the ensuing consequences. The loan is issued for certain period and not free. This also applies to overdraft.

This raises fair questions: “Do I need an overdraft?”, “How to connect?” and “How is it extinguished?” The answers to them depend on its type and the bank providing this service.

Kinds

There are:

1. allowed,
2. unauthorized (technical) overdraft.

Let's look at them in more detail.

Permitted overdraft

An authorized overdraft is activated upon the personal application of the cardholder. It is provided within established by the bank limit and at a certain percentage. These conditions differ not only between different banks, but also among different clients of the same financial institution.

Overdraft limit– this is the amount that a bank client can have if there is a shortage in the account own money. Calculated for a specific person, based on the amount of funds that pass through his card, his credit history and some other factors.

Bank interest rates also vary. For example, Sberbank has established the following:

• 20% within the cash limit,
• 40% – fee for late repayment,
• 40% is a fee for exceeding the limit, but only by the amount of this excess.

Attention! Sberbank does not connect the overdraft service to all cards, but only to debit (salary) cards. But, for example, if you are the owner of “MIR Classic”, “MIR Gold”, “MIR Premium”, then an overdraft limit is not provided. Full list can be found on the bank's website.

In my article about I dwelt in more detail on the issues of tariffs, conditions for receiving and using them. If you haven't read it yet, catch up.

IN Tinkoff Bank The following conditions apply:

1. The service is activated at the initiative of the bank and with the consent of the cardholder.
2. If you borrowed no more than RUB 3,000 from the bank, there will be no overdraft fee (provided you repay on time within 25 days).
3. If the loan amount was from 3,000 to 10,000 rubles, then the bank will take 19 rubles. in a day.
4. From 10,000 to 25,000 – 39 rubles. in a day.
5. Over 25,000 – 59 rub. in a day.
6. The fine for late repayment is 990 rubles.

These conditions apply to debit cards; for credit cards, only a technical overdraft is possible.

Read about the terms of use and pitfalls in my article. It can be very useful. Especially if you are on the way to choosing the optimal means of payment.

Unauthorized overdraft

An unauthorized or technical overdraft can occur even if you have never taken out a loan. And this often becomes an unpleasant surprise, which results not only in the occurrence of debt, but also in the accrual of interest and fines for non-payment. To avoid this, you need to know the common causes of debt:

1. Exchange difference. This case may arise when you pay with a ruble card abroad. Due to the features banking system funds are debited from the account after a few days. If during this period the exchange rate has changed sharply, then you can go into the red if there are insufficient funds on the card.
2. Payment mandatory payments. For example, bank commissions.
   I will comment on this case using my own example: once a year, in May, a service fee of 450 rubles is automatically deducted from my card. I usually withdraw from the card all the money received on it. Result: in May I went into minus by 450 rubles, i.e. a technical overdraft occurred.
3. Technical error of the bank. For example, a double deposited amount or, conversely, withdrawal of the same amount 2 times. The bank notices the error and corrects it. But the client may not have money in his account, so again it’s a minus.

Avoiding technical overdraft is easy. He who is forewarned is forearmed. If we know about the potential possibility of going into the red, then it is enough to keep a minimum reserve of money on the card or constantly monitor the account status in order to pay off the debt on time. Banks often provide Grace period(usually a month), during which we can repay the entire amount of the debt without interest.

Connection conditions

Let me remind you that overdraft is activated with the client’s consent. Sometimes this service is automatically included in the bank account agreement. Therefore, I never tire of repeating that we carefully read all the documents and ask about any ambiguities. There is a signature in the agreement - it means that we agreed with all the bank’s requirements.

The conditions for connecting to an overdraft service in banks are different, but here is an approximate list of documents that may be needed:

1. Application for connection.
2. Borrower's questionnaire on bank letterhead.
3. Passport.
4. Another document confirming your identity (for example, SNILS, Taxpayer Identification Number, driver’s license).
5. Certificate of income (not all banks require).

As you can see, the set of documents is minimal.

Since the bank agrees to share its money with us, it is understandable that it makes certain demands on potential borrowers. Among them may be:

1. Having a permanent residence permit and living in an area served by the bank.
2. Having a permanent job and work experience.
3. Having an account through which funds regularly flow.
4. Clean credit history.

This is why overdraft is actively connected to salary cards. Often banks themselves call the client and offer this service. Here it would be appropriate to explain how a debit card differs from an overdraft card.

Remember! When you pay with a debit card, you control only your money. And not a penny more. If you have activated an overdraft service, you can borrow the missing amount from the bank. But this is no longer yours, but someone else’s money that needs to be returned.

An overdraft is a short-term loan. Its terms vary from 6 months to 1 year. During this time, you may lose or change your job, move, etc. Therefore, banks require that the contract be renegotiated periodically. This way they reduce the risk of non-return of the money provided to you.

How does an overdraft work: differences from a loan

This service works exactly the same as any loan. I borrowed money, which means that after some time I have to pay it back and pay interest for using someone else’s money.

Although an overdraft is a type of consumer loan, there are still differences between them.

The advantages of overdraft, or what it gives to a competent user

Traditionally, I will consider all the advantages and disadvantages of a card with an overdraft.

Advantages:

1. This non-targeted loan, so you can spend it on anything.
2. The amount is constantly renewed. No need to go to the bank and register new loan. The main thing is to repay on time.
3. There is no collateral or guarantors.
4. Interest is charged only on the amount you borrowed, not on the entire amount. available limit. If you do not use an overdraft at all, then no interest is charged.
5. You can use the money at any time, regardless of bank opening hours.
6. You can cancel the service at any time.

And, of course, the disadvantages:

1. With all the availability of money, we must not forget that this is a loan. Repayment is mandatory and inevitable.
2. Interest is accrued daily, and the amount is repaid in one payment, automatically when money is received into the account.
3. You have to renew the contract often (usually once a year).
4. Credit limit (usually does not exceed monthly account inflows).
5. High interest rates on loans. In this way, the bank compensates for its risks.
6. The ability to go into a technical overdraft without knowing it.
7. There is a great temptation to get carried away with easily accessible money and lose control over expenses.

How to disable overdraft

To refuse this service, just write a statement about it. The contract will be terminated if there is no debt to the bank.

Please note that if you change jobs, it is not enough to simply throw away your previous employer's salary card. Contact the bank or check yourself to see if there is any debt. Otherwise, you may receive an unpleasant surprise in the form of accrued interest and penalties for late repayment of the debt.

Some banks practice the impossibility of disabling overdraft. This must be included in the contract. In this case, when concluding it, you can specify a zero limit on receiving money.

Conclusion

Everyone chooses for himself what kind of money he will live on, his own or borrowed. There is no need to be afraid of overdraft, but you need to understand how to use it so as not to drive yourself into debt trap. Keep your finger on the pulse of your finances at all times. Then you can afford a little more than you have available this moment time. Agree, this is sometimes vitally necessary.

I would be glad if you supplement the article with your thoughts on this matter in the comments. Or maybe you have interesting cases from your life? They will give readers the necessary experience and provide invaluable assistance.