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Framework credit – works easier than you think

The car has to be repaired, the short trip has to be paid for, new furniture for the house and apartment would be cheap: There are many occasions for which we use our overdraft facility in our daily account or even take out apparently cheap installment loans. However, the overdraft rates in Austria are usually very high and consumer loans are far from flexible at all banks. See for an observation

A short-term loan offers the right alternative here: Often this is also known in Austria as a framework or on-demand loan. In the Anglo-Saxon region, the term payday loan is used here. A modern short-term loan offers numerous options for financing: if necessary, quickly on the account, flexibly payable as a loan and – depending on the offer – usually even at low-interest rates.

Framework credit – works easier than you think

A short or framework credit is comparable to the often used overdraft facility on the current account. Your bank sets up a line of credit up to a certain amount that you can freely use and which can be repaid flexibly. The loan is not necessarily linked to a checking account – you can, therefore, apply for it at any financial institution.

However, such short-term loans sometimes differ in terms of structure: banks usually assign you as a consumer a certain credit range depending on their credit rating. Within this, you can then determine and apply for the appropriate credit line yourself.

Application and payment: Short-term loans are almost always applied for online in Austria today and are usually immediately available in the account. So if you need money, you can call it up at any time from the framework credit account. There is no minimum amount here, nor do you have to exhaust the full credit line.

Our tip: Many providers allow you to use a flexible short-term loan on your current account with an Austrian bank.

Repayment and repayment: The repayment and repayment of the currently used amount for short-term loans and medium-term loans are regulated quite differently. Many providers ask for a pro-rata monthly repayment – either through a fixed sum or in the form of a certain percentage. At some banks, however, the amount of the repayment is entirely up to you.

Our tip: If possible, you should regularly repay your short-term loan and also use flexible repayment options beyond the required minimum amount – if the cash register is available, ideally even the entire amount currently called up. This always saves interest and is completely free of charges compared to many classic consumer loans. Furthermore, breaks in payments or installments should not be exhausted permanently – after all, the longer your repayment takes, the more expensive it is with the loan.

Interest: Pleasingly, you only pay interest on the amounts of credit that are currently called up. It should be noted, however, that interest rates on short-term loans are usually variable and can, therefore, change at short notice. Banks regularly use current reference interest rates.

Our tip: There are rarely call credits with lower campaign interest for a few months. Such an offer can certainly pay off for you for example, if your short-term loan is only intended for a short time. However, pay attention to a punctual repayment and explore the conditions afterward.

What you can use your short-term loan for in everyday life

When do I need a short-term loan in everyday life? For many cases – if you need money at short notice, have to survive a financial shortage until the next salary in the account, or also want to avoid or redeem expensive loans. Important: Even if it is often only small sums – you should be sure that you do not have to use your financing framework permanently. It is ideal if you can repay the amount of the loan as quickly as possible or to a large extent.

Unforeseen acquisitions: From travel to cars to home repairs – a flexible short-term loan can be ideal in many cases. Especially if there is money in the foreseeable future from savings contracts, Christmas bonuses or other benefits.

Avoiding overdraft and installment credit: With a short-term loan, you can also cleverly avoid expensive overdraft interest on a checking account or a longer installment loan. This helps to save and creates freedom in budget planning. A call credit can also save money well.

Reduce debts or reschedule debts: This is, even more, the case if you permanently use your overdraft facility on your account or even pay off expensive long-term loans from previous years with high-interest rates. On the one hand, you can conveniently repay part of the debt or even completely reschedule it.

The conditions for short-term loans are often lower – especially in comparison to disposable or credit card debts, but also with some spontaneously concluded consumer loans. A major advantage in addition to the interest is, however, that there is no prepayment penalty or additional expenses for a small loan – you can pay it off flexibly, which is what the household budget currently offers.

Our tip: you actually owe the debt and don’t move a loan permanently to the next one. Especially with higher sums, a cheaper installment loan can sometimes be the better solution – with a good credit rating, lower interest rates are often feasible than with a framework loan. So be sure to explore the individual conditions of the banks beforehand by comparison.

Protect investments and savings: Even if you have currently invested funds elsewhere and these cannot be called up without loss, a short-term loan is suitable as a bridge. This applies, for example, to lucrative time deposits or savings plans as well as to equity and fund investments.

Our tip: To quit prematurely or realize losses when the stock market prices are down, that can quickly become a financial boomerang.

Create additional financial buffer: Furthermore, a flexible short-term loan can easily be applied for as a hidden cash reserve. With the agreed credit line, the money is available to you at short notice, so you can use it at any time if you really need it. A call-off and framework credit is also ideal as a spontaneous buffer in the long term – for example for unexpected invoices and purchases, but also for one or two spontaneous requests.

Our tip: With a short-term loan, you can react immediately if necessary, bypass the overdraft facility on the salary account and do not have to explore the right consumer loan in time constraints. Furthermore, interest will only accrue on your hidden cash reserve when you actually call it up.

Ideally online – in a few steps to a short-term loan

A short-term loan, short-term loan, credit line or on-demand loan. Whatever the name of such offers from banks, they are usually readily available on the Internet:

Apply quickly online: The application is similar to an ordinary installment and consumer loan: If possible, fill out the application conveniently online and forward it directly to the bank using the online form. Alternatively, an application for a short-term loan is usually also possible by post.

You can also carry out your identity check either using the classic post-identification procedure at the counter or using modern video-ident from your home PC or smartphone. Direct banks today often offer their services digitally without exception.

Good creditworthiness brings advantages: Banks in Austria generally check the creditworthiness of consumers before customers grant them a short loan. Here you have to prove your financial situation through the latest salary slips and remuneration notices or through evidence of other current loans.

With some providers, the self-employed and freelancers often receive a short-term loan. The latest tax assessments or a list of previous year’s income from self-employment are required. Advantage: You can now conveniently store all documents online by email as PDF or digitally directly from the bank.

Loans are usually quickly available: Today, in times of digital media, processing and credit checks are usually completed in a few days. Offers from direct banks often make it possible to pay out even on the same day or within a few hours. In this way, you can freely dispose of your short-term loan in the shortest possible time and repay it flexibly according to the agreed conditions.

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