ülelaenutusse

ülelaenutusse is an Estonian term that translates to "overdraft" in English. It refers to a facility provided by a bank that allows a customer to withdraw more money than is currently available in their account, up to a pre-approved limit. This creates a negative balance, meaning the customer owes the bank money. Overdrafts are typically used to cover short-term cash flow gaps or unexpected expenses.

When an account goes into overdraft, interest is usually charged on the overdrawn amount. The interest rate for overdrafts is generally higher than for other forms of credit. In addition to interest, banks may also charge fees for utilizing the overdraft facility, such as a fixed fee or a percentage of the overdrawn amount. The terms and conditions, including the limit, interest rate, and fees, are set by the individual bank and are part of the customer's banking agreement.

Overdrafts can be a useful tool for managing personal finances, but they should be used with caution due to the associated costs. If an overdraft is not managed properly, it can lead to accumulating debt and further financial difficulties. It is important for individuals to understand the specific terms of their overdraft facility and to repay the overdrawn amount as quickly as possible to minimize interest charges and fees. Some banks offer overdraft protection, which can link an overdraft facility to a savings account or credit card to prevent transactions from being declined if the current account balance is insufficient.