Overdraft - a saving bank loan

Overdraft - a saving bank loan

For the general concepts of the theme, Referring to the value of the term. Overdraft - with English (overdraft) It translates as "short term loan", the actual bank lending to legal entity account, for the payment of settlement documents with a shortage or absence of money in the current account.


Each bank has its policy on issuing, before selecting a specific proposal from the bank should examine thoroughly all aspects and pitfalls. Here's how it works itself calculation circuit limit. For, that would calculate the limit, Bank uses as raw data the average monthly turnover on the current account of a legal entity. The turnover is taken into account only on financial investments on the part of the buyer. Internal movement of funds on the account are not counted when calculating the overdraft limit, only profit. To calculate the limit also takes into account the number and frequency of financial revenue to the account.

The value of the average monthly cash turnover is calculated on the 50-70% (It depends on the bank's policy), the final figure is, the extreme limit of the overdraft.

Most of the legal entities is given an overdraft for a year, under these conditions the period tranche (time, during which the borrower can use the loan without repayment) It can vary from 1 to 12 months (period yet again depends on the bank's policy). overdraft, as a kind of bank loan, must be repaid on the maturity. It is also necessary to understand, that the use must be paid, that is, the customer pays for the interest service( It depends on the conditions of bank overdraft), also pays commission ( for the issue, for unrealized loan).

It is considered the most economical (read profitable) bank credit, since the repayment of the loan takes place due to financial revenues on account of the company. It is an effective way to overlap the financial margin in the account, if necessary.

Overdraft in action

example: for one day, we take the beginning of the day, morning, the company paid for the service provider in the amount of at 2 thousand. dollars in overdraft, then towards the end of the working day to the account of the company received funds from the buyer in the amount of 1 thousand. dollars. Then, with the beginning of a new day, when you need to pay for use of overdraft interest, received the money to the account went to repay the loan, accordingly pay interest only for the 1 thousand. dollars of the principal debt. overdraft, as a kind of lending, ideal for companies, in which there is a constant movement of money on the account of the supplier-buyer, when there is always turnover of Finance.

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