When it comes to increasing liquidity and increasing financial flexibility, credit is the best option. All banks offer the framework credit in various forms, such as disposition credit and/or call-off credit. For many banks issuing credit cards, credit card users are now also granted a credit line. In these framework loans, banks occasionally allow cardholders to clear the balance in monthly installments.
Dispo and call-off loans – Loans with appropriate framework
A frequently used credit line is the discretionary credit. Banks often even provide the dispo to their customers at a certain height today. As an alternative to the disposition or parallel usable some banks offer the call credit. This loan has the advantage that it is not tied to the management of the current account. In addition, the call-off credit is much cheaper from the credit costs than dispatching.
Another and often used by many consumers frame loan is the installment loan on the credit of a credit card. The so-called revolving credit, in which card issuers give their customers the opportunity to use the credit card with a part payment function. This allows consumers to pay off the monthly balance of the credit card not in installments but in installments. For cost-conscious consumers, however, this framework loan is rather unsuitable. For the installment credit on the credit card, the banks levy horrendous interest rates, which make the credit unattractive.
Consumers, who regularly spend more money in the short or medium-term than their bankruptcy state, have a good opportunity to be financially more flexible with credit lines. So they stay always and constantly solvent.
How to define framework loans
Framework loans have a defined financial framework. Within the framework, the borrower is allowed to dispose of money that he does not actually have. Framework loans are to be applied for, for example as a disposition credit with the account-holding bank. On the other hand, the most cost-effective call-off loans exist only with a few providers. The mentioned revolving credit cards hold a relatively large number of banks ready.
In order to get a framework loan in one form or another, the applicant should have a proper Schufa statement. In addition, a regular seizable income of the same magnitude must be proven from a permanent position.
The upper limit of a credit line is usually based on the income of the applicant. In the case of the MRP, it can be assumed that banks usually grant a framework of up to three net incomes. For call-off loans, it is quite similar and for revolving credit card credit terms are dependent on the card issuer. Here, however, often no proof of income to submit.
Advantages and disadvantages of framework loans
Framework loans in one form or another are perfectly useful as a supplement if a consumer is fundamentally able to handle his finances well and consciously. They demand more discipline and a sense of responsibility due to the very flexible nature of the repatriation of borrowers. However, they offer the advantage of financial independence and freedom of choice to use the framework credit or not.
If the credit line for the collection and call-off loan is only used in such a way that it can be balanced out again within three or four months, interest rates are not so high. On the other hand, anyone who permanently uses their dispo and covers a large part of their living expenses uses a very expensive loan. The interest on the credit line Dispo averages more than twelve percent. In addition, interest rates are variable and can be adjusted by the Bank at any time by increasing market conditions.
Frame loans do not incur any costs as long as they are not used. The costs are only incurred when used for the amount claimed.
When the installment credit on the credit card, if the settlement of the balance by the deadline, no interest. Framework loans, however, carry the risk of getting into a debt spiral if used lightly. A user usually notices this when he realizes that he is no longer able to balance the balance of the loans. Alternatively, an installment loan can be the perfect option to balance the balance.
Consumers with appropriate creditworthiness are advised to buy at least one of the possible credit lines. This keeps them financially flexible and allows them to pay unexpected expenses without having to apply for an installment loan.
The revolving credit card is only conditionally recommendable. In principle, a classic credit card, in which the accrued balance at the end of the month must be fully offset, sufficient as an additional means of payment.