For short-term liquidity bottlenecks, there is the Dispositionskredit, also called Dispo. It is the most expensive loan ever!
Banks generally grant a credit line for the checking account for regular salary payments. Another term for this is “credit line” . This often happens automatically. There is no separate credit agreement. Therefore, the bank can also cancel the posting at any time.
The amount of the repayment credit is usually two to three times the monthly net salary. On the checking account usually the furnished Dispo is noted. Also, the interest rate for this should be apparent on the extract.
Flexibility is paid dearly
A calculation of disbursement interest is made only for the amount that has been used. As soon as the debit balance is lower after a cash receipt, the interest is calculated only for this smaller amount. The loan is thus very flexible. The repayment also takes place without a specific agreement.
But: the discretionary loan is the most expensive loan ever!
On average, interest rates are 12.4 percent. If, for example, the current account is covered by a 1,000 euros check-in fee for three months, then at 12.4 percent, at least 31 euros have to be paid.
For six months, the interest amounts to 62 euros. At 5,000 euros for a quarter already 155 euros or for half a 310 euros.
Interest is charged on settlement of the current account, monthly or quarterly.
Caution: The simple use of the Dispo easily leads to expenses for which the necessary liquidity is not available. Some current account holders lose the overview easily. This can be the beginning of a debt spiral.
Practical tip: If you have to use your credit line again and again, it may be worthwhile to move the checking account to a bank, where the MRP interest rates are “cheap” in comparison. Some banks also offer a framework loan (call credit). This is just as flexible as a Dispo, but cheaper.
Tolerated overdraft even more expensive than Dispo
The bank can tolerate that the checking account is also overdrawn beyond the dispo. But she does not have to. For a tolerated overdraft is again charged an increased interest rate. This overdraft interest is usually again 3 to 7 percent higher than the already high disbursement interest. This high interest is also payable if no account has been granted on the account and the account is overdrawn.
Practical tip: If you have been using the check-in or even a tolerated overdraft for a long time with your current account, you should consider rescheduling with a installment loan. The advantage is a lower interest rate and a controlled repatriation.