Terms of overdraft

Overdraft - a special form of short-term bank lending, which gives the customer the right to pay from your current account goods, works and services of its counterparties in the amount exceeding the amount of credit the proceeds to his account, ie, have on the settlement (current) account debit balance.
Credit under overdraft is multipurpose in nature and is issued to cover the client's needs for working capital.
Overdraft - a negative balance on the current account of the client, sometimes acquiring the status of the loan, ie. E. A form of short-term credit, the provision of which the debit of the account the bank's clients in excess of the account balance, resulting in a debit balance.
Terms of overdraft
Crediting customer's current account may only be exercised if it is provided in the contract of bank account. In addition to the bank accounts of commercial banks enter into a loan agreement (the agreement), which specifies the basic conditions for granting and repayment of the loan, its maximum size and duration.
Overdraft is considered a form of preferential lending, so it must provide borrowers with a sufficiently strong financial position with a temporary shortage or lack of funds in the account to make payments.
In the Russian practice of commercial banks provide overdraft customers under the following conditions:
conclusion of the contract of bank accounts for cash management services;
No requirement for settlement (current) account of the client (card index number 2) for the last three months;
the presence of constant speed on the current account;
the stability of the settlement (current) account of the client with the lending bank and other banks;
the presence of an impeccable credit history;
stable financial and economic activity of the client-borrower.
Overdraft limit and deadlines

Bank lending settlement (current) account of the client in case of insufficient or lack of funds it is carried out within the established limit. Overdraft limit is determined by the needs of the customer in cash on completion of payments taking into account the possibility of regular repayment of the loan and the borrower's individual characteristics. Credit limit overdraft is usually established by the bank in a certain percentage (proportion) of the average monthly income on the settlement (current) account of the customer in the bank for the last 3-6 months.
Providing a bank overdraft loan and its repayment can be made by the borrower repeatedly during the term of the contract (agreement) lending bank and the customer's account within the prescribed credit limit. Since the loan is provided in the form of an overdraft to cover short-term needs of the client in cash for working capital, the period of use of each individual loan should range from 15 to 30 days.
repayment of the overdraft
Through a loan on overdraft paid as payment documents submitted to the bank by the client-borrower and documents presented to his settlement (current) account other customers during the trading day. Payment of payments made through credit overdraft in excess of the balance of the settlement (current) account of the borrower at the end of the trading day, but within the limits of available credit limit. Debit balance, formed as a result of such operations on the customer's account is transferred from the account to the loan account to the account of loans granted in the form of an overdraft.
When the overdraft debt repayment sent all amounts credited to the current account of the client, so the amount of credit varies as funds become available, which distinguishes from conventional overdraft loans. Interest is charged on existing or agreed rates.
Repayment of overdraft loan made by the daily debit of funds from the settlement (current) account of the borrower without acceptance within the available balance in the account of the client at the end of the trading day.
In the event of overdue overdraft received in repayment of client money directed primarily to repay the fees for overdrafts, and then to repay interest and principal.
The fee for overdraft
When a loan in the form of overdraft banks receive income in the form:
interest for the use of borrowed funds, which are calculated based on the debit balance on the account for the actual time of use overdraft;
the fee for the opportunity to use overdraft.
Fee for the use of overdraft loans is set, as a rule, at a rate of slightly higher than the refinancing rate of the Bank of Russia, as a percentage of the loan amount for each day of use overdraft.