Who does not know this saying: At the end of the money is still so much month left! As funny as this saying may sound, it is so momentous in reality for those people who regularly find themselves in this situation. On the one hand, the days until the next salary payment are counted and, on the other hand, with fears of the ongoing debits from the checking account and its slipping into the minus. It gets bad when, due to a lack of account funds, the bill can no longer be paid and credit transfers are made. For people who have no savings on their savings account or checking account as an emergency reserve, an overdue bill with the appropriate reminder fees can be very expensive. So it is not surprising that the so-called scheduling loan enjoys great popularity.
Every 3rd German citizen uses the credit line
According to a recent survey by Postbank, the credit line is now used by every third German citizen. Despite the high interest rates often associated with the credit line, around three quarters of all people in Germany have set up a repayment credit facility through their home bank, which is used by at least 29 percent of all respondents. Of these, 23 percent only occasionally use the credit line and six percent at regular intervals. The reason for this high level of usage is the flexibility and ease of use exercised with the credit line. The sometimes immense high interest rates seem hardly discouraged by consumers.
The credit line is not suitable as an emergency loan due to its cost
But precisely in this ignorance regarding the interest burden and the fact that behind the claim no firm regulation of the loan repayment is, there is a high risk of over-indebtedness. Although the settlement of the credit line is made directly through the cash receipt as an immediate offsetting, but the amount granted the credit line is usually 2-5 times the monthly income. Those who continuously exhausted this credit line, defying regular salary arrears month after month a mountain of debt in front of him, which is also more expensive by the monthly accrued interest. In this respect, every bank customer should ask themselves whether they would be better off financially in the form of a fixed, monthly repayable installment loan .
The choice depends entirely on the amount and duration of the need. For a short bottleneck, a short-term loan or mini-credit is also recommended here. For larger purchases, as already mentioned, an installment loan is clearly the more sensible option.