None of us is immune from unexpected financial expenses, for example, your mobile phone is out of order or an emergency car repair is needed. Of course, it would be nice to have a certain amount for a "rainy day", but what if there is none?
The ideal way out of this situation would be overdraft. Today we will talk about the pros and cons of this type of lending.
An overdraft, unlike a regular consumer loan, is always provided on a card, most often a salary card.
It follows from the very meaning of the word “overdraft” that this is something beyond the project, beyond the plan, in other words, by providing an overdraft, the bank allows you to spend more funds than is on the card.
Overdraft types
Overdraft can be permitted and technical.
FROM permitted overdraft everything is as clear as possible, this is the amount that the bank approved for you.
Technical overdraft- this is a debit balance on a card account (or a negative balance) not allowed by the bank. This overdraft may result from:
- currency exchange transactions
- write-offs of previously erroneously credited funds
- conducting unauthorized transactions.
As a rule, 14 days are given to repay a technical overdraft, and if you meet this deadline, then no penalties will follow.
For exceeding the deadline, you will have to pay, for example, in Belagroprombank, you will be charged an interest rate on the balance of the debt in the amount of the refinancing rate of the National Bank. Belinvestbank warned that in case of untimely return of the entire amount of the technical overdraft and payment of penalties, they may even suspend the card.
The conditions of different banks may differ, so we recommend that you ask the bank that issued your card if a technical overdraft is possible with it, and what are the conditions for it?
Overdraft amount and term
Overdraft limit the bank will determine for you on an individual basis, depending on the level of income, it can be either 1 average monthly salary or a large amount.
As a rule, an overdraft loan is provided by opening a revolving line of credit for a period of about 1 year with the possibility of extension. In other words, during this period you borrow from the bank, then return and borrow again.
Interest rate and maturity of overdraft
Overdraft rates today are in the range from 10% to 16% per annum. However, some banks offer more favorable conditions for repaying debts in a short time:
- Technobank - 0.0001% per annum - provided that the tranche is used for no more than 10 days
- Idea Bank - 0.01% per annum - during the first two months
- Belagroprombank - 9% per annum - within 90 days
BelVEB Bank offers its customers a reduced interest rate of 0.001% per annum on the Kali Laska overdraft loan subject to the following conditions:
- full repayment of debt within 20 days
- carrying out non-cash payments using a card (with the exception of paying utility bills, cash withdrawals, paying for insurance services and some other operations)
In addition, the rate under the contract may depend on the category of the client. For example, owners of premium cards may be offered a lower rate.
The maturity of an overdraft loan is the period of time for which you need to pay off the bank. In different institutions, it may differ, somewhere these terms are shorter, somewhere more.
Let's give an example
Idea The bank provides an overdraft for payroll customers for a period of 23 months. You need to repay the loan 1 month after the expiration of the overdraft - you have 2 years to pay off the bank. The main debt is returned in equal parts, interest is charged on the balance of the principal debt.
It turns out that you can use the overdraft for 23 months. You take a certain amount, pay it off, take it again, and so on as needed. The main thing is to meet the limit that the bank has set for you. You must repay your debt in full within 1 month after the expiration of the overdraft period.
Bank Moscow-Minsk gives 90 days to repay each tranche, and the overdraft itself is provided for 12 months. Suppose you added the missing amount for the purchase of a refrigerator through an overdraft, you need to return it within 3 months, but at the same time you can make other expenditure transactions using credit funds - the main thing is to meet the limit.
Commissions and penalties
If we talk about a bank card, the first commission that comes to mind is "for withdrawing cash from an ATM". However, do not worry, if you use your bank's ATM when withdrawing, you will not be charged a commission. In "foreign" ATMs, the amount of the commission will depend on
And now for the penalties. Can't avoid fines in case of late payment. For example, in Belarusbank, the overdraft penalty rate is equal to the refinancing rate of the National Bank and amounts to 10% per annum.
In Decision Bank, for the amount of overdue debt on the main debt, the rate for using the loan is charged, increased by 30 percentage points, which will amount to 46% per annum! On the amount of overdue interest, you will be charged 0.1% for each day. The amount of the penalty charged on the amount of overdue debt on the principal debt will be 0.3% for each day of delay. Therefore, it makes sense to pay everything on time.
Results
The presence of an overdraft on the card gives you the opportunity to use borrowed funds daily, 24 hours a day.
An overdraft loan for a salary card can be obtained online, and in most cases without a certificate of income!
The repayment of the overdraft and interest on it occurs automatically, with each receipt of money on the card.
Of course, using an overdraft, you, as in the case of a regular loan, overpay the bank. However, in emergency situations, it can be extremely useful. Although, it is worth remembering that having such a “magic” card in your pocket, there are more temptations to find a use for available money.
July 9, 2014 22893It is unlikely that modern economic history has remembered a certain William Hogue if not for an incident in Edinburgh in 1728. Then Royal Bank of Scotland issued the first overdraft in the world in the amount of 1000 pounds sterling to the above-named Englishman. At that time, he had a much smaller amount in the account.
The very meaning of "overdraft" is translated from English (overdraft) - as "overspending", or "over the plan". From there, a new loan product began to circulate. And the term "overdraft" and the overdraft procedure itself spread throughout, at that time still feudal Europe, and passed into standard banking practice.
Overdraft- one of the types of short-term loans that banks provide to financially stable customers, both individuals and legal entities.
As for the features of overdraft lending, there are several nuances that are mandatory. Firstly, an overdraft is issued by crediting funds to a debit card. As a rule, this salary card, although there is an option to enroll on a separate "overdraft" card.
Secondly, theoretically, the overdraft term can be up to three years. But as a rule, it does not exceed one year. However, if you did not have any problems with repaying the overdraft to the bank, the latter will be happy to extend the overdraft again.
Sweet credit honey
An overdraft is a revolving line of credit. Thus, during the term of the contract, the borrower can use the funds within the limit an unlimited number of times, provided that the necessary payments are made on time. It is convenient and hassle-free.
The loan is repaid automatically upon receipt of funds to the cardholder's account (if the overdraft was provided to another card, the funds must be specially credited to the overdraft card). This is another one plus overdraft- no need to puzzle over when and how to pay off the debt, everything happens by itself after the salary is credited.
An overdraft is much more profitable and cheaper than a regular microloan, and it is also easier and faster to apply than a regular consumer loan. And the most important thing! It frees you from the unpleasant procedure of searching for money " till payday».
The tar of credit captivity
Should know! There are not only permitted overdrafts, but also technical ones, that is, when the amount of expenses exceeded the amount that was on the account. This happens when converting or withdrawing from ATMs, when the commission for cash withdrawal blocked the remaining funds.
When an expense occurs above the limit, banks usually give up to 35 days to pay off the technical overdraft. Otherwise, the bank may apply penalties.
Having issued an overdraft, the borrower may also face certain difficulties that cannot always be foreseen in advance. For example, this is a possible delay by the employer of wages or unforeseen problems when it is transferred to bank card accounts, or a decrease in income. All this can lead to the application by the bank sanctions in the form of accrual of additional interest on the amount of the spent overdraft.
You also need to remember that some banks charge interest for cashing out overdraft - not only in ATMs of other banks, but also in their own.
In connection with the latest changes in banking legislation, the procedure for obtaining an overdraft has changed slightly. Previously, it was enough to write an application for opening an overdraft line at a bank that serves the organization that pays you a salary. Now, in a number of banks, in addition to the application and passport, you will be required to additionally income statement.
By the way! Overdraft rate floating in all banks, and may vary depending not only on the value of the refinancing rate, but also at the discretion of the financial institution itself. The collateral is usually penalty.
Not so long ago, some Belarusian banks had the practice of concluding contracts for payroll projects in parallel with the sale of an overdraft to employees. And by the way, for many, this became unpleasant news, when, after the dismissal, the bank began to actively inform about the presence of God knows where the overdue delay on the overdraft came from.
Overdraft interest exceeds interest on loans, and is about 40% per annum. But this is less than the interest on loans in microfinance organizations. The convenience lies in the fact that if the overdraft is not used, interest on it is not calculated. It turns out a kind of stash "for a rainy day" - convenient and inexpensive.
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You can get borrowed funds for current expenses if you apply for a credit card or a consumer loan. Belarusbank customers do not need to conclude new agreements and pay an extra commission, it is enough to connect an overdraft of Belarusbank to a debit card and use the borrowed funds at their discretion.
What is an overdraft and how it works
Overdraft involves short-term lending within the limits set by the bank. For private clients, the service is connected to a debit bank card, as a result, the user receives two banking products in one payment instrument - a card for receiving payments, to which regular receipts are received, and a credit card.
Borrowed funds are written off when own money on plastic runs out. At the first receipt of funds to the account, the credit limit is first restored, which can be reused.
Interest is charged on the amount of credit funds spent by the client. Belarusbank does not provide additional fees for connecting an overdraft. If the client does not use the overdraft established by the bank, no fees or interest will be charged.
Features of an overdraft in Belarusbank
A credit institution offers cards with overdraft lending already connected, for example, the Magnit installment card, on which borrowed funds can be used without interest, and cashback is credited for purchases at their own expense. You can set a credit limit for other payment instruments if the account receives regular credits.
Belarusbank clients use an overdraft on a salary card and on payment instruments to receive pensions, benefits, scholarships or alimony.
If the client does not receive regular transfers to the card account, but has a deposit in Belarusbank, the credit institution can connect an overdraft within the Free Choice service, in which case the credit limit will be up to 50% of the deposit in the bank.
Conditions for granting an overdraft in Belarusbank
For customers who wish to connect a credit line to a debit card, Belarusbank offers the following conditions:
| Overdraft type | The principle of calculating the maximum amount of the credit limit | Interest rate, % per annum |
| Quarterly repayment | Average monthly income for the last 3 months | 15,4 |
| With a maturity of 6 months | Maximum 400% of the average monthly income | 15,4 |
| For customers using the "Premium" package with a maturity of 10 months | Up to 600% of the average monthly income | 15,4 |
| For users of the "Optimal" package with a maturity of 2 years | Based on solvency, maximum 7000 BYN | 15,4 |
| For holders of the banking package of services "Prestige Plus" and the maturity of overdraft debt is 2 years | Based on solvency, maximum 10,000 BYN | 15,0 |
| VISA Platinum, MasterCard World Black Edition cardholders and Persona club members. Overdraft maturity up to 10 months | Within the limits of solvency, a maximum of 20,000 BYN, if a trust management agreement has not been concluded and a maximum of 30,000 BYN, if there is a trust management agreement | 15,4 |
For delay in payment, sanctions are provided, which consist of a fine of 10% per annum and a penalty for not paying the loan on time.
The overdraft limit is valid for the period of use of the card. Guarantors and other collateral for the credit limit are not required.
The "overdraft" service is not provided for the BELKART "Agrarnaya" card, for accounts opened in foreign currency, and for non-residents of the country.
What do you need to get an overdraft?
Citizens of the Republic of Belarus who have a source of income and permanently reside in the country can apply for a credit limit for a personal debit card.
To obtain an overdraft, Belarusbank requires the following package of documents:
- Applicant's passport;
- Income statement for the last three months or bank statement;
- Consent of the client to provide reports (credit history) from the National Bank of the Republic of Belarus or independently provide a credit history from the National Bank of the Republic of Belarus;
- Consent to the processing of personal data.
All certificates are valid for 30 days from the date of issue.
Documents are submitted to the office of Belarusbank along with an application for the provision of services.
How to apply for an overdraft in Belarusbank
The basis for considering the possibility of connecting a credit limit to a debit card is the application form of the client.
You can apply in the following ways:
- At the branch of the credit institution where the debit card is opened;
- Using Belarusbank self-service devices;
- On the official website of the financial company or at the link https://belarusbank.by/ru/fizicheskim_licam/cards/uslugi/overdraft;
- Through a personal account in the system;
- In the mobile application;
- By phone customer support 147.
According to the questionnaire submitted remotely, the bank makes a preliminary decision, announces it to the client and asks to bring a package of documents to the office of Belarusbank.
Through mobile banking
In the mobile application, to apply for an overdraft connection, you need to complete six steps:
Primary identification occurs by the card number of the owner, if the preliminary decision is positive, you can collect a package of documents.
Via internet banking
In the personal account on the website of Belarusbank, the user can apply to connect the service, for this it is necessary:
If the decision is positive, the employee will contact the clients and inform about the date and time of providing the original documents.
Overdraft for Velvet card
For Belarusian pensioners, the credit institution offers a range of banking products within the framework of the Velvet club. Along with loans at a preferential rate, deposits with an increased interest and cashback, the owners of BELKART-Maestro Velvet can apply for an overdraft to their debit card.
Before you take an overdraft from Belarusbank to a pension card, you need to apply for the transfer of a pension to a plastic account. After three months from the date of the first receipts, you can apply for a credit limit.
In the online questionnaire, you must specify the first 9 digits of the Velvet card number, the system will automatically determine the owner, set the amount and conditions of the overdraft.
How to use an overdraft
The Bank does not impose restrictions on the intended use of borrowed funds. When the credit limit becomes available, the owner of the plastic decides for what purposes to spend the money.
When requesting a balance, the total amount of available funds is reflected, so the established overdraft amount must be taken into account when planning financial expenses.
The client must fully repay the overdraft plus interest on it before a certain date specified in the agreement. The minimum period during which you can use the limit is 90 days. The bank informs borrowers via SMS about the amount and date of repayment.
The funds received as payment for the overdraft can be used again, with the exception of the amount of interest that the client pays to the bank.
On the Magnit installment card, the overdraft repayment period depends on the point of sale at which purchases were made, in any case, when the limit is restored within one month, interest is not charged.
Pros and cons of overdraft lending
According to customer reviews about overdraft in Belarusbank, we can distinguish:
Benefits of using a credit limit on a debit card:
- The overdraft is tied to a valid card, so there are no additional fees for opening new banking products;
- Remuneration is charged only for the funds used, if the limit is not used, there will be no fee.
- The term of the loan is limited by the validity of the card;
- After the limit is restored, the credit money can be spent again.
- There are no restrictions on the intended use of funds.
- Fast registration, minimum package of documents and absence of collateral and guarantees.
The negative aspects of connecting short-term borrowing include:
- A small credit limit, which depends on the monthly income to the account;
- The need to repay the entire loan amount in the shortest possible time;
- When using credit funds, cashback for purchases is not credited.
Conclusion
For customers wishing to use borrowed funds in small amounts, a debit card overdraft is best suited. Before connecting, you need to find out what a revolving credit limit is and how it works, after which it will become much easier to plan your personal budget.
An overdraft is a form of short-term lending that allows the client to pay for goods and services with funds that exceed his credit income. It is issued when there is not enough money on the client's current account, that is, the borrower receives a loan for an amount that exceeds the balance of his funds. An overdraft differs from a regular loan in that the debt is repaid with all funds received on the client's account. Depending on the bank's credit policy, the client may be granted a grace period during which no interest will be charged.For using the overdraft, the client pays interest to the bank, as well as for the time of using the borrowed funds. It can also be withdrawn and, for the opportunity to use the service
Overdraft for individuals
Within the framework of this agreement, the period for granting borrowed funds does not exceed 6 months. After the opportunity to use the overdraft limit, the client is not obliged to immediately master it. It is more profitable to borrow funds when necessary, since in this case the cost of paying interest is significantly reduced.An individual who has a bank account linked to a debit bank card can receive an overdraft. The presence of a credit card greatly simplifies the procedure for mastering the credit limit. The interest rate on overdrafts is much higher than on directed loans, because the lack of collateral increases the risk of loan default.
Terms of Service
The conditions for granting an overdraft in different banks may be different. The main thing is that the borrower has a fairly stable financial position and regularly makes payments.To obtain an overdraft, you must write an application for a loan and fill out a standard form of personal data. It is also necessary to have a document confirming citizenship - a passport and another document (driver's license, health insurance policy, foreign passport, etc.). You should also take a certificate from the place of work, which confirms the availability of income.
The borrower must be a citizen of Russia and reside in the territory served by the selected bank. The presence of work and work experience can also become a prerequisite (some banks require work experience of 6 months or 1 year)
Terms of registration
The period of registration of an agreement for obtaining an overdraft is no more than 6 months. The amount of the loan provided is determined by the needs of the client and his ability to repay the loan. The limit is set by the bank, determining it based on the average monthly income that came to the client's account over the past 3-6 months. When withdrawing funds, it decreases, and when crediting, it is restored.Overdraft redemption
The borrower needs to make regular payments within the established period, the amount of which is stipulated in the loan agreement. Interest is calculated on the actual debt. At the same time, funds can be withdrawn as needed within the established limit. As a rule, repayment of an overdraft occurs automatically, for example, when payroll is calculated.If the salary, for any reason, was delayed by the employer and you do not have the opportunity to deposit funds, the bank will charge penalties and may reduce the overdraft limit.
