What is a call credit? Call credit, what is it?
With an on-call loan, consumers are given a credit line that they can access at any time. Thus, financial gaps can be closed without having to apply for a loan every time or to be bound to fixed terms and loan installments.
In principle, the call-off loan works like a credit on the checking account, but offers much better conditions. These can differ significantly depending on the provider, so that a precise comparison is worthwhile in any case.
Advantages of a call-off loan at a glance:
- Credit line between 2,500 and 25,000 euros, depending on the credit rating
- Free delivery
- No processing fees
- At any time have the full amount or partial amounts
- Interest will only be charged on amounts claimed
- Repayment in one sum or flexible installments
- Significantly cheaper than a Dispo
- Apply conveniently online
The call-off loan can be concluded with any provider. A checking account is not required for this.
Maturities on call-off credit
Call-off loans are issued without a fixed term. The minimum monthly repayment also does not constitute a term, as the repatriated amounts are immediately available again as a credit line. Irrespective of this, the call-off loan can be terminated by both the bank and the borrower with a certain period of notice. As a rule, this is between three and six months. Unused parts of the credit line can be terminated at any time.
Possible credit sums for a release loan
The possible credit line always depends on the creditworthiness of the applicant. As a rule, banks offer amounts between € 2,500 and € 25,000. With that, the possibilities go far beyond those of a disposition credit. As long as the credit line is not taken, usually no costs. In addition, the borrower can freely decide what amount he wants to retrieve. There is no minimum payout from the banks.
How does the loan payment work?
Who concludes an on-call loan, receives from the bank the right to take advantage of a certain credit line. To retrieve a certain amount there are different options depending on the provider. If this is a direct bank, the payment can be conveniently requested online. The amount will then be transferred to the reference account specified at the time of conclusion of the contract. Alternatively, amounts can usually also be requested by telephone. Branch store customers go to the next branch and fill in a request form here.
How is the call-off credit repaid?
Most banks have a minimum monthly repayment that the borrower has to make. This usually amounts to between one and two percent of the utilized loan amount. In addition, special repayments can be made at any time. For this, the borrower incurs no additional costs. Some banks also offer the option of settling only monthly interest. Also possible is the agreement of a fixed additional rate, which will be deducted by direct debit from the reference account.
In rare cases, banks also grant a repayment-free period for the call-off loan. In this case, borrowers only have to start repayment after a certain period of time.
Interest on call-off loans
Call-off loans are subject to a variable interest rate. This means that the interest rate can change at any time. Interest generally only accrues for the amount actually used. Compared to an overdraft facility, the interest rates for a call-off loan are significantly lower. Depending on the provider, the annual percentage rate of interest ranges between 6 and 9 percent. In contrast, interest rates of up to 14 percent are often charged for the dispo. The accrued interest is collected together with the agreed minimum repayment monthly from the borrower’s reference account.
Requirements for a call-off loan
An on-demand loan is subject to conditions similar to a disposition or installment loan. First and foremost, the customer must be able to prove sufficient income and a private credit report without negative entries. If possible, income should stem from employment as an employee, employee or civil servant. Some banks also require a permanent employment relationship. In most cases, the applicant may not be in the probationary period. See also articles on instant loan conditions.
In principle, there is also the possibility for self-employed and freelancers to receive a call-off loan. These usually have the tax returns of recent years as well as a profit and loss account or a business evaluation (BWA) available.
Here are the requirements at a glance:
- demonstrable regular income
- sufficiently good credit rating
- an advantage: employee in permanent employment
- for self-employed or freelancers: evidence of the above-mentioned documents of recent years
Call-off loans and their use
Due to the flexible application options, call-off loans are becoming more and more important for private customers. The advantages over a discretionary loan are enormous. So the call-off credit is not only much cheaper, the financial framework is much higher. Those in urgent need of a new car or furniture will certainly appreciate the high credit limit and do not have to take any special car loan.
Who finances major purchases with the call credit, but should also pay attention to some points. Because of its flexibility, the loan can easily lead to unnecessary purchases. Due to the usually very low minimum repayment, this may lead to over-indebtedness. A distribution of the repayment over a long period of time increases the interest burden. Therefore, it is advisable to repay the call credit always as soon as possible.
Secure on-demand loan via a default insurance
Most banks offer optional credit loss insurance for the on-call loan. In cases such as unemployment or incapacity to work, these assume the minimum rates that apply. If the borrower dies, the outstanding loan amount will be repaid. However, such insurance can significantly increase the cost of the loan. The market standard is a monthly premium of 1 percent of the loan amount drawn.