Every person is sometimes faced with a situation when a salary or other income must come from day to day, and money is needed today. In this case, overdraft registration helps, which is a certain type of lending that allows you to exceed the expense over the account balance.
Overdraft is a special form of lending, during which the borrower is given the opportunity to spend an amount that exceeds the available funds in his account. This procedure is very popular among people who receive wages through plastic cards. The peculiarity of this type of loan is that it is tied to the account on the client's debit plastic card. It is short-term, since the maximum loan term under the agreement is no more than 12 months. At the same time, it can be extended by signing an appropriate agreement with the bank. The amount of the overdraft is limited by a certain limit, which is calculated depending on the average monthly income of the client received through this plastic card. Loan interest is calculated every day on the amount of money actually spent in excess of the limit. An overdraft can be issued at preferential rates when there is an interest-free repayment period. An overdraft is a revolving credit line, according to which the borrower can use funds an unlimited number of times during the term of the agreement, within the limit and subject to timely repayment. As a rule, funds in the required amount are withdrawn from the borrower's plastic card upon receipt of wages or other income. First, the overdraft limit is restored, interest is paid, and the balance is transferred to the client's account. Banks set a period of 30 to 50 days, during which money can be debited from the borrower's account, in the absence of income, the client is obliged to repay the debt by depositing funds from other sources. There are two types of overdrafts for individuals: permitted and unauthorized. The first case relates to a standard overdraft loan under which the contract is concluded. When the client exceeds the spending over the set limit, an unauthorized overdraft occurs.
