Overdraft facility

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The credit facility (commonly known as "line of credit" only "Disposable") is that of banks on a current account overdraft facility granted, subject to limits.

General

According to Section 7 No. 1 of the General Terms and Conditions of Savings Banks , a current account is managed as a current account within the meaning of Section 355 HGB. This implicitly provides both credit balances and debit balances . Since 1957, wages and salaries in cash have been displaced in Germany in the form of wages , because more and more companies and local governments started to transfer wages and salaries. As early as 1958, there were around 4.7 million current accounts in the savings bank organization. A book by Karl Weisser was published in 1959 with the title Cashless wages and salaries . Since then, the credit institutions in Germany have also allowed account overdrafts, as long as they were in reasonable proportion to the monthly incoming wages or salaries. In its current form, the Kreissparkasse Köln introduced the overdraft facility as one of the first institutes in 1968 in order to survive the increasing competition with other institutes.

Legal bases

Without special agreements, disposals of current accounts in the context of payment transactions must be covered by bank balances . This was also required by the earlier transfer right of Section 676 (2) sentence 3 BGB a. F., according to which sufficient credit must be available to carry out the transfer. The coating of the account is when the credit or expressly approved credit line is not sufficient for these decrees, the decrees are yet executed by the bank. It is a so-called "tolerated account overdraft". The mere tolerance of an overdraft does not entitle the customer to credit from the bank.

The overdraft facility is a form of open-ended current account credit and allows the account holder to make dispositions in the context of payment transactions even without an account balance. The disposition credit is a loan within the meaning of § § 488 ff. BGB, in particular § 493 BGB, according to which it is qualified as a specific consumer loan contract . Specifically, the overdraft option granted is regulated in § 504 BGB, according to which it is designed as a consumer loan in such a way that the lender grants the borrower the right to overdraw his account in a certain amount in a contractual relationship via a current account. The prerequisite is that no other costs besides the interest are charged and the interest is not charged in periods shorter than three months. In that case, the bank must inform the account holder of the following key data before making a claim:

  • the maximum limit of the loan,
  • the annual interest rate applicable at the time of notification,
  • the conditions under which the interest rate can be changed,
  • the regulation of contract termination

The last two conditions may be mentioned on a bank statement.

Section 492 BGB (consumer loan contracts ) and Section 495 BGB (cancellation policy) do not apply to the overdraft facility. In the case of the overdraft facility, the payment by the bank is always preceded by the request by the customer, with whom the loan offer is accepted and thus the claim to payment is justified.

The age of majority of the account holder is also decisive . Since children and young people under the age of eighteen are legally considered to have limited legal capacity, they are only allowed to keep a current account on a credit basis.

Types of overdraft facility

Two types have emerged in the practice of credit institutions. Either the account holder only receives a letter from the bank in which the credit has been granted unilaterally, or simple information appears on the account statement that an overdraft facility can be used immediately. From a legal point of view, both forms of a loan offer are a “unilateral declaration of intent” by the bank. In the case of such an overdraft facility, the bank's disbursement action is always preceded by the request by the customer, with which the unilateral declaration of intent is accepted and thus the entitlement to payment is justified. In this case, there is a legal right to a loan - possibly only for a short time - which is deemed to have been accepted when it is called up. With the disposal by the account holder, a loan agreement according to § 488 BGB comes into effect.

In the case of unauthorized account overdrafts, however, there is no entitlement to the credit before the execution of the payment instruction, which is at the discretion of the bank - which also represents the implied acceptance of the customer offer to conclude the loan agreement.

conditions

The credit line specified in the unilateral letter from the bank or in the account statement is the limit up to which the bank is prepared to execute payments in the payment transactions even without an account balance. The prerequisite for this are regular incoming payments on the current account (e.g. net salary, maintenance, pension, etc.), of which two to three times the value is usually set as a credit line by the bank. As a rule, no collateral is required for this loan ( blank loan ). Account holders are expected to be able to repay the loan drawdown within two to three months without any problems, so that permanent and growing debt can be avoided and a "freezing" of the overdraft facility can be prevented. “Freezing” in this context means that the debit balance remains at a certain level for a period of more than six months and is not significantly and sustainably reduced by account credits. Furthermore, the account holder is obliged to dispose within the agreed framework. Intentional excesses of the agreed limit are only permitted if they have been agreed with the bank in advance. The overdraft facility is automatically revived, even if the checking account has shown credit in the meantime.

Lending rates

Debit interest is calculated on a daily basis for the use of the overdraft facility . If the specified credit limit is exceeded, additional overdraft interest will apply . The interest is usually charged to the current account on a quarterly basis as part of the accounting process .

The interest rate for the overdraft facility is variable and depends on the current market interest rates . Interest is only due for the amount that was actually used. The overdraft facility can be used without prior notice (hence its name overdraft facility from the Latin “disponere” for “dispose”) and can also be repaid irregularly and in different amounts without prior notice .

The interest rates are relatively high compared to other types of credit. For this reason, a debt rescheduling into a lower-interest installment loan should be undertaken, provided that a permanent use of the overdraft facility is foreseeable. If the overdraft facility is used continuously for more than six months with a certain basic amount, there is a “frozen overdraft facility”, in which the interest burden is noticeable. In August 2013, the magazine Finanztest from Stiftung Warentest determined an average interest rate of 11.31 percent for overdrafts at 1,538 banks and savings banks in Germany. The range ranged from 4.2 percent to 14.75 percent. In a follow-up study in September 2015, which covered 1,472 banks and savings banks, the average interest rate was 10.25 percent.

termination

According to the terms and conditions of the savings banks, ordinary termination is possible, at least in the case of the savings banks, without observing a specific period (No. 26, paragraph 1, terms and conditions of savings banks). Termination of the loan without notice is only possible for an important reason; examples of this are listed in No. 26, Paragraph 2 of the General Terms and Conditions - not exhaustively. This also includes a significant deterioration in the financial situation (No. 26 Paragraph 2 a of the General Terms and Conditions) or the initiation of foreclosure against the account holder (No. 26 Paragraph 2 d of the GTC; e.g. attachment of the account). According to §§ 488, 489 BGB on consumer loan contracts, a period of notice does not have to be observed if the financial circumstances change so drastically that a loan repayment is endangered. There is no period of notice in such a case. After termination, amounts owed, including the use of the overdraft facility, are due immediately (No. 26, Paragraph 3 of the General Terms and Conditions).

Attachability

In the case of an account attachment, a distinction must be made between openly granted overdrafts and merely tolerated account overdrafts. Only the free parts of the funds provided as part of an agreed loan approval can be seized. The seizure only takes effect here, however, if the account holder calls up these free parts (i.e. has them available through cash withdrawal or transfer). However, if the customer does not dispose, the garnishment does not apply.

International

In Austria , the overdraft facility is more commonly referred to as an “overdraft limit”, “account limit” or simply an overdraft. It often arises automatically and tacitly due to regular account credits, longer account details as well as unproblematic account processing and is usually granted to the account holder automatically (and without request). In Switzerland, on the other hand, an overdraft in the form of an overdraft facility is possible, but not common in banking. In Anglo-Saxon countries, the "bank overdraft" allows business people to withdraw more money from the account than was available on it; this option is not available for private individuals.

See also

Web links

Wiktionary: overdraft facility  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. ↑ Deutscher Sparkassen- und Giroverband, On the history of the savings banks in Germany, No. 45 from December 2010, p. 17 f. (PDF; 1.2 MB)
  2. ↑ Karl Weisser, Cashless wage and salary payment: How it is carried out in practice , 1959
  3. ↑ Pioneers of the time. Pioneering achievements in product development - trend-setting business policy
  4. ↑ No. 20.1 d) AGB Sparkassen
  5. ↑ BGHZ 93, 315, 325; 147, 193, 202
  6. ↑ a b BGHZ 147, 193, 195; 157, 350, 355
  7. ↑ BGH WM 2001, 898 ff.
  8. ↑ BGHZ 157, 350, 355 f; BGH WM 2004, 669, 670
  9. ↑ cf. Ganter in Horn / Krämer, Bankrecht (2002), pp. 135, 141; Staudinger / Kessal-Wulf , BGB revision 2004 § 493 Rn. 33
  10. ↑ Overdrafts test by Stiftung Warentest, Finanztest 09/2013, pp. 12-17 and at www.test.de (accessed online on August 31, 2013)
  11. ↑ Finanztest 09/2015, pp. 14-18
  12. ↑ BGH WM 2004, 669, 670
  13. ^ Fay Thompson-Hosein: Principles of Accounts (Cxc). Heinemann, 1988, ISBN 978-0-435-98309-3 , p. 85 ( limited preview in Google book search).