Unexpected expenses, urgencies: it may happen that you have to draw from your account more frequently. It therefore happens to have to have a certain additional sum, to be able to make ends meet in peace. The bank credit can be the solution as an alternative to personal loans : this is what it is and how it works.

What is a bank trust

What is a bank trust

Bank credit is a credit instrument that banks can grant to their customers. The opening of credit is a contract with which the bank undertakes to keep available to the other party a sum of money for a given period of time or indefinitely. Furthermore, it is also possible to sign this contract as collateral (real or personal).

This type of financing is extremely useful for both families and companies. To enable them to own an overdraft or available money, the bank credit thus becomes a valuable ally. If the customer finishes the liquidity available on his current account, he is sure that he can count on a certain amount agreed with the bank.

How does it work

How does it work

Through the bank credit you can withdraw money from your account even if the balance is negative, within the limits of the sum agreed with your bank. The applicant is required to reimburse the amount paid as soon as he / she has an economic return. Obviously, in addition to the amount, the bank also defines the repayment plan of the installments and the timing related to the balance of the debt.

How to request it

How to request it

The application can be presented at the branch, by filling out a specific form. The valuation criteria can be considered similar to those of traditional loans: the bank checks whether the applicant meets the economic requirements for the revenue and the monthly budget. In particular, it is good practice to make sure of any pending payments in progress, to avoid slippages in the procedure.

Delivery times

Delivery times

The request of the bank credit is a procedure that involves short times, provided that the requirements defined by the bank are met. The credit institution, in fact, must first carry out all the necessary checks, to assess whether the person will be able, from time to time, to return the sum of money he has requested. In principle, the outcome of a credit line grant can go from a few days to a maximum month (usually, if you exceed the month from the request, the credit can be considered not granted).

return

return

After the agreed period of time, the bank will proceed with the request for the return of the bank credit requested. It is good to always keep in mind a very important detail: the longer the time required for the return, the greater the interest rates will be applied.

Two clarifications

Two clarifications

  • The main advantage of a bank credit lies in the possibility of having coverage to make expenses, even urgent, despite a passive account.
  • Since the interest rate is variable, it is advisable to define a cost plan before requesting a bank credit. In order to avoid the risk of a negative balance, it is useful to distinguish between payments with a constant amount (such as loan installments) and variable payments (such as bills, taxes).

An example

An example

Consider that a person earns 1500 euros a month. In that same month, there were extra expenses, assuming an amount of five hundred euros more than the gain. The person in question, if he has activated a credit, can withdraw some money even if, in doing so, the account goes in red.

This sum of money will then be taken directly from the salary of the following month, with the application of the related interest rates. It is important to specify that this is just one of the possible examples: the methods of requesting money, the interest rate and the timing for the return can vary according to the specific agreements that the person takes with the credit institution that grants him the credit.