Do you have a negative balance? Discover what to do
The negative balance or debit balance in the current account is one of the main reasons that lead the Brazilian to enter the list of defaulters. The overdraft has one of the highest interest rates in the credit market, averaging 13% per month – a rate that varies between banks and customer profiles.
The reduction of the basic interest rate of the economy (Selic) that has been taking place in recent months has not yet had an effect on the rates charged by the banks. And here comes the question: what do you do to get out of the negative balance?
With the new special check rule, announced in April 2018, banks should offer the installment of the negative balance to customers who use more than 15% of the limit for 30 consecutive days.
The idea is to reduce the growing number of debtors. But just as with the option to split the debit balance of the credit card last year ( new rules of the credit card ), the interest on installment of the overdraft tends to increase with time.
Bank debts lead the ranking of the main defaults in the first quarter of 2018. More than half (51%) of the arrears registered in Brazil are with banks or other financial institutions. Next, find out what to do with the negative balance and how to avoid the debtor balance with the banks.
What do I do with the negative balance?
The first step for anyone with a negative balance in the bank account is to “put out the fire”, that is, get rid of the debt with the bank as soon as possible.
In most cases, banks offer a quick solution to negotiate overdraft debt, even by the teller or app. Despite the anxiety to get out of the negative balance, it is necessary to evaluate the conditions of negotiation of the outstanding balance.
Negotiating the overdraft is more of an urgent loan that the bank makes available for you to get rid of the negative balance, and the service can be very expensive for your pocket.
Before accepting the conditions of negotiating the direct overdraft with the bank, look for alternatives that may be cheaper, such as a personal loan , with lower interest rates than negotiating with the bank. Write down bank fees and compare rates to a personal loan.
Here at Good Credit, you have a chance to receive various personal loan proposals and choose the one that best suits your needs.
In addition to using the loan money to pay off the negative balance in the checking account, you can pay off other outstanding debts and even anticipate future debts.
Is it worth splitting the overdraft?
After 30 days with the negative current account balance, banks should offer the installment option. But attention: installment is actually a new loan from the bank and like any loan, there are interest charges and fees.
So, you need to assess whether the option of splitting the bank’s overdraft is the best one for your pocket. This is why you need to evaluate other possible options to get rid of the negative balance such as a personal loan. Compare now without compromise .
Can I close the account with a negative balance?
Banks can not prevent the closing of an account with overdraft debt. However, the debt remains active until you pay.
Canceling a negative balance account is not the best choice because it damages your relationship with the bank. In the future, you may have a hard time opening a new account.
The ideal is to negotiate the debt and only after starting the payment of the agreement request the closure of the account. According to Procon, the customer can close the account at any branch of his bank, not just the one in which he requested the opening.
What to do to avoid the negative balance?
Financial unrest knocks on your door and you’re already using the overdraft limit? That’s where the problem lies. Financial planning is key to avoiding bank debt. So you need to change the way you approach finances.
Start by controlling your spending in a notebook or worksheet to see if you are spending more than you should. After you clear your debts, make a financial reserve to have more peace of mind in the emergency moments.
The positive balance in your bank account is essential to your financial health. So, look for a line of credit that not only keeps your balance positive, but also helps you to organize your budget.
Do Banks Release Loan for Negative Balance?
Most of the time, banks only offer the option of negotiating the overdraft. The possibility of a new loan depends on the relationship you have with the institution.
The problem is that the more credit you ask the bank, the trend is for rates to rise. So, if you are already on a negative balance, negotiate the debt and, before applying for a new loan to your bank, compare personal loan rates on Good Credit.