arvelduskrediiti

Arvelduskrediit, often translated as overdraft facility or line of credit, is a type of loan offered by banks and financial institutions. It allows an account holder to withdraw more money from their bank account than is currently available, up to a pre-agreed limit. This facility is typically attached to a current or checking account.

The primary purpose of an arvelduskrediit is to provide a flexible source of short-term funding to cover temporary shortfalls in cash flow. This can be useful for individuals or businesses to manage unexpected expenses, bridge gaps between income and outgoing payments, or take advantage of unforeseen opportunities.

Interest is charged only on the amount of the overdraft that is actually used. The interest rates for arvelduskrediit can vary significantly between institutions and may be higher than those for other types of loans. Fees may also apply, such as arrangement fees or monthly service charges.

When an arvelduskrediit is in place, the account balance can go into negative territory, representing the borrowed amount. Repayments are typically made by depositing funds into the account, which then reduce the outstanding overdraft balance. Some agreements may require regular repayment of a portion of the principal, while others allow for repayment to be deferred as long as the balance remains within the agreed limit.

It is important for account holders to carefully understand the terms and conditions associated with their arvelduskrediit, including the credit limit, interest rate, fees, and repayment obligations, to avoid potential financial difficulties.