Framework credit, also known as call credit at some institutions, has become a popular form of additional liquidity. Unlike a normal loan, it is not a one-off sum that is constantly being repaid, but the permanent availability of additional capital. Some people already see the credit line as an alternative to the normal overdraft facility. But is that also true?
How does the credit line work for the customer?
Anyone opting for a credit line will discuss a fixed framework with the executing bank
the line of credit from which this type of loan gets its name. For example, it could be agreed that an additional 5000 USD will be permanently available. What makes the loan special is the fact that the loan can be used again and again. If around 2500 USD of the 5000 USD have already been repaid, the customer could have the remaining amount. He is only obliged to pay the interest. The differences between the providers are important: While some banks prescribe a fixed monthly repayment of the framework loan, there are also providers who only request payment of the interest.
Special repayments are then used here, which have also become a standard for the other form of loan. The differences in interest rates are also interesting. If the overdraft facility is usually between 12 and 17 percent, a credit line can be obtained with interest between 6 and 9 percent. It is therefore an interesting alternative for customers with good credit ratings. And: The overdraft facility is linked to an account with a bank, the framework credit can be requested independently from any other institution.
The search for the right credit line
The credit line is far from being available from every bank. Gradually, however, these are added to the portfolio, which makes the search a little more difficult. It should also be noted that the exact terms and conditions for the loan can vary considerably. If you are looking for this type of loan, you should take a look at our framework loan comparison. This makes it possible to compare the different providers and financial institutions with regard to the conditions and to choose the offer that best meets your own requirements.
The framework credit has already become an interesting alternative to overdrafts due to its flexibility and lower interest charges. If you are planning a debt restructuring or want to have financial freedom, you should consider the possibilities in this area.