How high are the interest rates for a credit line?
As already mentioned, the bank pays a lot for the flexibility of an overdraft facility. Compared to a normal installment loan, the interest rates for an overdraft facility are much higher. According to the financial test, the average interest rate is 9.48 percent! For comparison: According to Statista, the average interest rate for an installment loan at the end of 2018 was 4.84 percent.
However, the interest rate differs from bank to bank. You can see how high this is at your bank either on your bank statement or online on the website. Since 2016, banks have had to make their overdraft interest public. But caution should be exercised here as well: Because some provide such unclear information that the exact costs are not presented clearly enough in the end. That is also a complaint financial test.
The overdraft interest is due for every euro that you overdraw your account – and this until you balance it out again. The fees for this are debited on a quarterly basis.
Here is a case example: You have an overdraft facility of EUR 2,000 in your account at an overdraft interest rate of 9.48 percent. You need money at short notice and overdraw your account by 1,000 euros. After 30 days you will have balanced your account again. For the period in which you used the overdraft facility, you pay 7.90 euros in interest at the end of the quarter.
Tip: With the Interest Calculator you can easily calculate for yourself what you will ultimately have to pay for your overdraft facility.