Self-employed and freelancers have no way of getting a credit facility
The most frequently used loan in Germany is the overdraft facility. It represents a line of credit that is set up in the current checking account. The amount of this credit line depends on the income and states how high the account can be overdrawn without further consultation with the bank. It can therefore be used in whole or in part at any time. The only requirement in order to be able to receive the overdraft facility is a regular income, which is achieved from an employment relationship. Self-employed and freelancers have no way of getting a credit facility. Alternatively, the working capital credit is available for them on the business account. Of course, the Credit bureau data must also be correct for the lending, so negative characteristics must not be included.
If this is the case, most banks already set up the overdraft facility when opening an account. In some cases, it can only be set up after the first salary receipt. Only a few banks still need to submit proof of salary for the institution, which can delay the application for a credit facility. Depending on the creditworthiness (creditworthiness) of the customer, the overdraft facility is granted twice or three times the monthly incoming money. Once the disposition loan has been granted, it will be issued by the bank until further notice, unless the payment is received, so it is unlimited.
Amount of the loan only if there is no more money in the account
The bank reserves the right to reduce the amount of the loan only if there is no more money in the account (e.g. when changing accounts) or if the income has decreased significantly (after a long illness, unemployment) or to delete it entirely. Such a change can only be made after six weeks. The overdraft facility is one of the most flexible loans at all, because the customer can use it as required. Interest will then only be charged for the drawdown and for the exact duration of the overdraft. If the loan is not used, it does not incur any costs. In addition, the loan is not repaid in fixed monthly installments;
If the loan is required again after it has been drawn down, it can be used up to the full amount at any time. As mentioned above, customers do not have to speak to their bank again. The banks can of course pay for this flexibility. Depending on the bank, between 8 and 16% pa are charged for the overdraft facility. It is therefore one of the most expensive loans. If it has been used due to a short-term need for money and the repayment is not possible in a few weeks, a rescheduling may be worthwhile, for example as an installment loan.