What is an overdraft?
One of the signs of our time is a stormydevelopment of lending to citizens. Today it is difficult to find a person who does not know what a credit card is, consumer credit, mortgage and so on. One type of loan products is overdraft. However, many are still not familiar with this loan. What is an overdraft?
The term "overdraft" originated from the English wordoverdraft, which means "overspending" in Russian. Overdraft as a banking service is a small short-term loan granted to organizations and citizens in case of expending on their account or card their own funds.
What is an overdraft in a bank and what are its features? The main characteristic features of the overdraft include:
- limited amount. As a rule, the overdraft limit does not exceed 50% of the regular receipts of money to an account or card (for example, a monthly salary);
- short maturities. The customer must repay the overdraft within one to two months;
- Overdraft can not be paid in installments. This loan is extinguished completely at the time of the next receipt of money on the card. The funds remaining after canceling the overdraft are credited to the debit account;
- interest for using the overdraft is charged daily for the actual number of days of using the loan;
- Overdraft is a revolving loan. After the debt has been extinguished, the overdraft limit is restored.
As an example, let's show what an overdraft is inSberbank. Sberbank provides an opportunity for holders of certain types of salary cards to get money in excess of the funds available on the card in the range from 1 to 30 thousand rubles (depending on the level of wages), but not more than 50% of the monthly income. Pay the loan is necessary within 30 days from the date of the report on the card. The cost of the loan is 20% per annum (with the possibility of changing the bank unilaterally). The fee for overdue debt is 40% per annum. Cashing overdraft occurs without commission (as opposed to funds on a credit card)
How to apply for an overdraft
For individuals, an overdraft is oftenan additional service for users of plastic cards (debit, salary, credit). This service can be connected both with the receipt of the card, and with additional reference to the office.
Read the special article that is an overdraft card of the bank.
Types of overdrafts
- Allowed overdraft. This is a loan received with the consent of the bank.
- Unauthorized (technical) overdraft. Formed without the consent of the bank. It turns out when charging commissions for certain transactions and the lack of funds on the card for writing off. Examples: withdrawing cash from the balance in an ATM of another bank, withdrawing money in a currency other than the account currency, writing off payment for servicing the card at zero balance. In Sberbank for unauthorized overdraft is charged 40% per annum.
Pros and Cons of Overdraft
The positive features of the overdraft include the ability to easily get money "to pay."
- small limited limit;
- the need to repay the loan in full in a short time;
- the formation of the habit of living beyond our means.