An overdraft facility is a loan where you only borrow exactly the amount that you need. You can also compare it with a bank account where the account is in minus. You pay interest and possibly. Fees for the amount you are in minus. When you deposit into the overdraft facility, you get less and you therefore have to pay less interest. If you often need to borrow relatively small amounts, a cash credit will often be the best solution.
An overdraft facility is useful if it often goes up and down for your finances
An alternative to an overdraft facility can be micro loans . However, if you often need a loan, it can quickly become expensive with many micro loans. The bank credit can be held and pulled when needed. On the other hand, if you only have a small loan requirement now and do not expect to borrow more money in the future, then the micro loan will often be better answered. So the question of what’s best, overdraft or micro-loans will often be best answered by looking at how often you need to borrow. If you borrow frequently, the credit card will be the best solution. If you rarely borrow, a micro loan will be the best solution.
An overdraft facility is a flexible loan that can be made bigger and less as needed
If you have to choose between cash or micro loans, it depends not only on your needs. It also depends on what is possible. Can you at all be approved for a cash credit and what interest should you pay? When you know this, try to make a realistic guess about your borrowing requirement for the next year, then calculate the prices for bank overdrafts and micro loans. Now, see exactly what is the cheapest solution for you, provided that your borrowing requirement will be as you guessed.
When we mention bank overdraft, it is also important to mention credit cards. Often credit and credit cards are linked together. With the credit card, you can pay for goods and thus use your credit if there is no money already in the account. You may, however, have a credit card without having a credit card attached. You can also have a credit card that you can only use as long as your account is in plus, ie. without having a cash credit. If you would like to know more about credit cards, please read our credit card guide.
Where can you get credit?
The obvious place to start is your own bank. Perhaps you have already been approved for overdraft on your bank account, so you already have a cash credit. It may also be that your bank does not offer you credit, and you have to look elsewhere. You can ask in other banks , or try one of the options below. Even if you already have the option of overdraft on your account, it may be smart to investigate your other options. Perhaps there are other providers who can offer better relationships and perhaps a better interest rate.
Peratsong overdraft facility
With a Peratsong bank credit you will receive a credit of up to DKK 20,000. You do not pay a setup fee and you can have the money in your account in 45 minutes. The exact price for Peratsong overdraft depends on your needs and how much you use the credit. You only pay interest for the money you borrow right now. Ie the amount you have raised on your bank overdraft.
Tipus bank credit
At Tipus you will receive a credit of up to DKK 12,000. New customers can borrow up to DKK 6,000 free of charge for the first 30 days. You do not pay any setup fee and you will receive an immediate response to your application. Your money will be credited to your account within 30 minutes if you apply for bank opening hours, which is until noon. 17.30 on weekdays.
Banyo bank credit
At Banyo, you get a credit of between $ 5,000 and $ 20,000. The loan is not marketed as a cash credit, but in effect, it does not seem to be a cash credit. You pay no fees but only interest. You can always pay the loan and as long as you have not borrowed the maximum amount of 20,000, you can also always raise the borrowed amount. You can thus raise and lower the borrowed amount as you wish. Completely as in bank overdraft.
With Banyo you get a fixed rate, no other costs and approval immediately.
Himbo bank credit
Himbo is a cash credit that currently has 25% off. You can borrow between $ 100 and $ 15,000 and have the overdraft as long as you wish. Your bank credit can initially be at the maximum of DKK 4,000. However, once you have proven that you can pay off your bank credit, you can continuously raise the overdraft facility up to $ 15,000. The first 30 day loan is completely free.
Gandalf Bank Credit
Gandalf offers bank overdrafts of up to 15,000 kr. Your bank credit is completely free for the first month. Subsequently, you only pay interest on the amount that you have deducted on the overdraft right now. Easily adjust the amount up and down according to your needs.
With the Tinkerbell, you will receive an answer to your application within 1 minute and payment to your account within 1 business day. The bank credit has unlimited maturity. You decide how much you want to draw on the overdraft and, of course, only pay for the amount you have raised on the credit.
VISA card with bank overdraft
At Bystander you can get a VISA card with bank overdraft. The card is called Bystander Red and you can find it here . Once you’ve clicked the link, select the credit card in the menu at the top to find Bystander Red. The bank credit is interest-free for up to 45 days, and you can make fee-free withdrawals abroad. The interest rate is from 8.95% and there is no annual fee. All in all, the cash at Bystander is a very attractive solution, where you can have credit for up to 50,000 kr.
Options for overdraft facilities
If you do not want a cash credit or you do not have the opportunity to get a cash credit, then there are other options.
As mentioned earlier in the article, microphone is an option if you only borrow small amounts a couple of times. Of course, you can use microwaves many times, but it often happens and it will soon be more expensive than other alternatives.
If you often need a loan, then it might be a better idea to take a longer loan. With a consumer loan you can often borrow money for between 1 year and 6 years. There are also short-term loans and some with longer duration, but most consumer loans can be chosen with a maturity of between 1 and 6 years. You will then have to consider the amount of loans you are currently in need of. Consumption loans can be obtained as low as $ 5,000. If you sometimes need more than this, it will often be cheaper to take a little bigger loan, and then pay one loan rather than borrowing more than one loan. One loan with 3 years duration will almost always be cheaper than 3 loans with every 1 year duration. One loan of DKK 10,000 will also be cheaper than 2 loans of 5,000 kr. The best advice is not to borrow more than you need but to borrow for a long time enough in one loan so you do not have to raise more loans.