Overdraft or loan?

Advantages of an overdraft?

• You have instant access to the money as soon as your overdraft is approved.
• An overdraft differs from other types of loans in that you only pay interest on the amount that you draw on the overdraft credit, and only for the period that the money is drawn.
• It is a flexible way to meet your financial needs. For example, as liquidity during periods of lower earnings or unexpected expenses.

What does an overdraft cost?

Your costs associated with an overdraft will usually be interest on the amounts that you draw on the overdraft. In general, the interest rate on overdraft is higher than on other types of loans. In addition, there is often a set-up fee, management fee, annual fees or overdraft fees on the credit limit.

Always read the loan terms before signing an overdraft.

What does it take to get an overdraft?

As with all other types of loans, there are a number of requirements for you as a borrower. The lender needs to make sure that you are able to repay the loan.

The typical requirements:

• You must be of legal age
• You must not be registered in the RKI
• It must be sustainable for your finances to take out the loan

This checks the lender by examining:

• Your creditworthiness (an overall assessment of whether you can repay the money)
• Your available amount (the amount you have available after all fixed expenses have been paid)
• Debt factor (calculated on the basis of your annual income and total debt. The lower, the better)

How to improve your creditworthiness?

First of all, you need to get an overview of your financial situation. There are a ton of free budget templates available on the web that can make it easier for you.

In addition, it is a good idea to collect your loans. When you collect your debt in one place, it gives a better overview and you have the opportunity to reduce your interest expenses.

Last but not least. Lower your consumption. Once you have an overview of your finances, you have a better opportunity to see where savings can be made. If you increase your available amount, you increase the likelihood of being approved for an overdraft.

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Pay off your overdraft debt

Overdraft, working capital, credit or line of credit - there are many names for it. An overdraft is ideal when your business has to deal with uneven cash flow.

With all the VAT, social contributions and other taxes that these companies pay to the state, it is sometimes difficult to plan the finances.

An overdraft (also called a line of credit, overdraft facility, or working capital facility) is a credit facility that allows a business to borrow money up to a limit at any time. Normally, the company pays a basic fee of 0.25-2.00% plus interest on the part of the credit that is utilized. The interest rate for overdrafts varies widely from bank to bank and depends on the creditworthiness of the company.

An overdraft allows the company to take the funds that you need to meet its short-term business goals.

Borrowing from Qred Bank vs. Overdraft

Borrowing from Qred is actually a bit like an overdraft. With us, you pay a fixed monthly fee, and only for the months in which the loan is active. If you get a loan with a term of 18 months, you will have to pay 18 x monthly fee. If you choose to repay your loan after just 15 months, the remaining 3 months of fees that you would otherwise have paid will be waived. Clever, isn't it?

Moreover, you get rid of creation fee, hidden and unexpected costs. You pay only amortization and monthly fee.

Not like traditional banks

Qred Bank is created for SMEs and entrepreneurs who want to grow and strengthen their competitiveness. With us, you get rid of long waiting times, unrealistic demands and paperwork.

Business loan from Qred Bank

How much can I borrow?
At Qred, all applications are processed individually through a credit assessment and an overall assessment of your and the company's financial health. The overall assessment determines how much you can borrow, as well as your monthly fee. Since we have both customers with loans of DKK 50,000 and DKK 1,500,000, it is therefore not possible to give an estimate of what a monthly fee may be for you.

If you want to get an estimate, please feel free to call us. From a number of control questions, we will often be able to help you with an estimate.
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What information and documents do you need for a credit assessment?
To carry out a thorough credit assessment we will need the following:

• Annual statement
• Bank Transcripts

If you want a quick response, make sure that all the requested documents have been submitted and all requested information has been filled in.
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Can I increase my loan amount?
The short answer is yes. Make sure to pay your invoices on time, as this is, among other things, a decisive factor in whether you have the opportunity to increase your loan. With good payment behavior, there is a possibility that you can increase your loan already after three months.
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Why Choose Qred Bank?
Our mission is to provide entrepreneurs with a banking experience that is different from the one they often get at traditional banks. Traders build the future and we support theirs.

Access to capital can be crucial to whether you can say yes to more clients or get hired for a larger project. Therefore, we have made sure that the money is paid out within 24 hours after you have signed your loan agreement.

At Qred Bank we have chosen to operate with a fixed monthly fee. This means that you are content to pay installments on your business loan and a fixed monthly fee. In addition, you will avoid unpredictable interest rates or hidden fees.

It can happen to even the best. Sometimes expenses pile up and that can make it hard to pay on time. Call us as soon as you know you can't pay on time and we'll do what we can to find a sustainable payment solution.

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