Relations with banking structures have tightly entered the life of every person. We use lending programs, open deposit accounts we pay utility bills, we get wages on cards. Banking services greatly facilitate daily tasks and provide citizens with the opportunity to take advantage of new banking products.
What does an overdraft card mean?
To understand what is the advantage of a banking product, you should study the general concept of the term "overdraft", which is this service.
Overdraft - short-term lending provided to regular customers of the bank on certain conditions that are previously agreed with the borrower. Funds are transferred by the bank to the client’s bank account. In case of unplanned financial expenses, when the amount of money in the account is not enough, the borrower has the right to use credit funds without visiting the bank office and signing loan agreements. At the same time, the debt should be paid at the end of the grace period (period), which is set individually for each applicant. As a rule, such a credit system works flawlessly, because overdraft is provided only to reliable and trusted customers.
Sberbank overdraft card: what is it?
Sberbank of Russia is the largest retail bank in the Russian Federation providing banking services to individuals and legal entities. What does Sberbank overdraft card mean? Having open checking account, the client has the opportunity to use the bank’s funds after they have spent their own. For the use of money, the borrower pays the interest rate accrued on the amount of credit funds. As a rule, a short period of time (from 30 to 90 days) is allocated for debt repayment. An overdraft card is opened for a maximum of 1 year, while the presence of a credit history in Sberbank is not a prerequisite for registration. Overdraft lending is provided that the borrower has a high level of solvency and a stable financial position.
Terms of registration and requirements for the borrower
The amount of the overdraft limit depends on the receipt of funds to the client’s account for the last 3 months. The Bank is entitled to recalculate the allowable loan amount on a monthly basis and independently reduce or increase the limit. The limit size may be affected by cash flows on customer accounts opened with other banks. An overdraft card can be issued to legal entities that are corporate clients of Sberbank, as well as to private clients, holders of debit cards (salary, pension, and others, which are regularly credited with funds). An application for activation of the overdraft service is considered within 8 days from the date of filing. For entrepreneurs who have a stable business, it is possible to issue an “Express overdraft” on simplified conditions for considering an application.
Difference between overdraft card from debit and credit
Despite the external similarity, there are a number of distinctive features by which one can judge how it differs debit card from overdraft, and also what is the difference between a credit card and overdraft:
- According to the conditions of registration, the debit card is intended for use only with your own money, without the possibility of a negative balance. The holder cannot spend more money than has been credited to his account (salary, pension, social benefits, scholarship).
- A credit card, in contrast to an overdraft, has a grace period of use during which the borrower can use credit funds absolutely free of charge (usually 55 days). The overdraft interest rate is accrued immediately after the withdrawal of borrowed money.
- A debit overdraft card provides for cash withdrawals without a commission, which is possible for a credit card only by bank transfer. There is no restriction on debit cards for cashless payments (taxes, fines, utility bills).
- A Sberbank overdraft card, the limit of which can reach 17 million rubles for large entrepreneurs and no more than 30,000 rubles for individuals, has a fixed debt repayment period, while credit card debt can be repaid in installments, paying only interest. The overdraft is repaid automatically by withdrawing the amount of debt from the client’s account. Credit card payments are required on your own.
Documents required for legal entities to overdraft
Obtaining additional financing from Sberbank in the form of an overdraft card is not so simple. The Bank provides loans to trusted customers who have a stable financial position and are consistent with the status of a decent payer. To open an overdraft account for legal entities, it is necessary to provide a voluminous package of documents:
- loan application;
- application form of the applicant;
- borrower passport;
- certificate of registration of the company;
- copies of constituent and statutory documents confirming the legal capacity of the client;
- copies of the charter of the enterprise;
- documents confirming the cash turnover of the enterprise;
- financial statements for the last date.
The Bank is entitled to request additional information to verify the financial situation of the client and his solvency. The application is considered by the bank from 3 to 8 days, while the service itself is provided to the borrower after at least 3 months, during which the bank checks the cash receipts to the client’s account and calculates the maximum loan limit. When all the formalities are met, credit funds will be credited to the client’s bank account, which means that the Sberbank overdraft card is activated.
Card for private customers
Not only large entrepreneurs, but also individuals who are holders of bank cards can apply for a short-term loan at Sberbank. What does overdraft card mean for private clients? The difference when applying for a loan is the size of the cash limit. Bank may lend money to participants salary projects and pensioners in an amount not exceeding 30,000 rubles. For issuing an overdraft by individuals, it is not necessary to provide a voluminous package of documents, the borrower must provide a passport of a citizen of the Russian Federation and an application. Sometimes a bank requires a second identification document (military ID, driver's license), as well as a certificate of income.
How to pay off debt
There are two ways to pay off overdraft debt:
- Periodically (every month), the borrower’s account is debited with the full amount of money necessary to repay the loan along with accrued interest (from 18% per annum in Russian rubles).
- Partial repayment of debt, depending on the financial condition of the borrower. The client repays the amount owed for each tranche used by automatically debiting the required amount from the account.
If the limit is exceeded, the interest rate on the loan may be increased at the discretion of the bank to 36% per annum.In addition, for commissioning services from legal entities, an additional commission is charged in the amount of 7,500 to 50,000 rubles (fixed rate - 1.2% of the established limit).
How to disable the overdraft service?
For many customers, the bank activates the overdraft service in the process of issuing any debit card. As a result, the Sberbank overdraft card becomes available for use to the holder. What is it and how to refuse an unplanned loan?
As a rule, it is impossible to disable the service after signing the contract. However, you can try not to allow a negative balance on the card, thereby not using credit funds. You can also set a zero overdraft limit when issuing a debit card, to which a short-term lending service is automatically connected. The bank is not entitled to increase the overdraft amount without prior approval from the client. Overdraft card is not valid after 1 year from the date of registration.
