Replace overdraft facility with installment loan and save hundreds of euros

Best installment loan

The banks make it really easy for consumer friends. If your salary is not enough, you can still easily afford a new iPhone, for example – thanks to overdraft facilities. But it can get really expensive. Because the courtesy of your bank only serves one purpose: your banker.

Overdraft interest is really tempting. You don't have to go to your bank if the account slips into the red. The crucial word, if you actually use this offer, is "times".

You should only use the overdraft facility if you can pay off your debt to the bank with your next salary. And, if you don't slip into the red again at the end of the month. Fixed therefore expressly warns: It's best not to get into debt in the first place! The following tips are therefore written as a pure emergency plan.

More information about saving money in everyday life

Dispo interest is outrageously expensive

Did you know that..
…you, even if you are so disciplined and actually pay back your overdraft a little bit month after month, still save far more than half in interest with an installment loan? And are you really that iron?

For the concession of the overdraft the financial institutions let themselves pay dearly. The most expensive banks charge up to 13 percent for short-term loans.

If you compare what banks and savings banks offer you for your money, sometimes even below one percent, then you know where the money for the glass palaces of the financial institutions comes from.

The overdraft facility is not a permanent solution

Maybe you know this: In January you have overdrawn with 300 euros, in February another 450 are added, at the end of December you have reached the overdraft limit. But even then the banks are still "obliging". They lend you even more money.

But everything above the "approved" overdraft facility then becomes even three to four percent more expensive. At the latest then you should pull the emergency brake and reschedule.

A concrete example calculation: overdraft facility vs. Installment credit

Reschedule overdraft facility

Reschedule your overdraft facility and effectively save money

Let's assume that you push 5 % month after month.000 euros for an overdraft facility in front of you. And larger salary increases or an inheritance are not in sight.

Then only one thing helps: You should quickly reschedule debt. Because for your overdraft interest alone, at a standard market overdraft interest rate of 11 percent, you pay a whopping 550 euros a year to your bank. Makes 1 in three years.650 euros.

For comparison: for a cheap installment loan with 5.If you have to pay off your overdraft facility for EUR 000 every month for three years (at EUR 149.50 each), the most favorable provider (interest rate 4.95 percent) will charge you just EUR 382. With this installment loan you pay off your overdraft debt. You save with it really smartly, namely 1.268 euros.

And after the three years you are debt-free, which you may not succeed with an overdraft facility because you are simply not disciplined enough.


The trick of paying off the overdraft facility with an installment loan has a small catch, however. When you pay off your installment loan, you should in no case fall off the wagon, so do not overdraw again. Because if you live beyond your means again, you'll be in debt in no time, because you have to pay back twice over.

The cheapest banks for an installment loan

If you've only ever associated C&A with cheap clothes, you should learn something new. Because the clothing chain also offers cheap installment loans.

But she is not alone. Because "real" banks are also favorable, in some cases even more favorable. Mostly you will look for your house banks however in vain under it. Because the banks with the best installment loans can be reached either only via the Internet or still additionally by phone.

The following banks currently charge between just under 5 and 5.55 percent for an installment loan described above, regardless of creditworthiness (this section is revised regularly – so it's worth looking in):

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