Instant loan, overdraft facility or installment payment: Which loan is right for you?

Whether it's a new kitchen, laptop or family trip – there is some flexibility in terms of how your purchases can be financed. But which BBVA solution is suitable for what you have in mind? We explain the differences, advantages and typical use cases for instant loans, overdraft facilities and Pay&Plan.

BBVA's instant loan is the right choice if you plan to address larger expenditures – such as those for renovations, furniture, or continuing education.

Advantages:

• Fixed monthly installments (12–96 months)
• Credit limit: €3,000 to €10,000 depending on your creditworthiness
• Immediate credit upon approval
• Interest rate advantage when income payments are deposited and installments are directly debited from your BBVA current account
• Credit-dependent interest rate, viewable with transparency
• Fully digital application, incl. Schufa credit check and digital signature
• No cancellation fees

The overdraft facility on your current account serves as a financial buffer in case the account is not covered in the short term – for example, in the case of unexpected bills or emergencies.

Benefits of the BBVA overdraft facility:

• Application possible immediately upon account opening, and always available after that point.
• Flexible repayment: No monthly installments - you settle (partially or in full) with your next income payment.
• Interest is only charged during the overdraft period.
• Credit limit individually determined, maximum is €500
• Fixed debit interest rate, billed quarterly.
• Activation and deactivation at any time via the BBVA app
• Credit check when setting it up

The overdraft facility is, for example, useful for preventing a direct debit (such as an electricity bill) from being processed when there are insufficient funds in the account. If a direct debit is not honored, the following usually happens:

• The payment will be reversed, and chargeback fees will apply.
• The provider may charge late fees or suspend the service.
• Repeated chargebacks can lead to a negative Schufa rating.

Important to keep mind: Overdraft facilities are significantly more expensive than instant loans when calculated on an annual basis and should for this reason only be used to bridge short-term money shortages.

With Pay&Plan by BBVA you can retroactively convert individual payments made with your BBVA debit card into installments, a simple way to have additional money in your account for immediate use.

Advantages:

• Flexible installment payments for qualifying purchases with the BBVA debit card, starting at €50 (online & offline)
• Retroactively divide purchases you have made within the last 3 months into 3 to 12 monthly installments.
• Purchases that can be financed are marked directly in the App and are for this reason "pre-approved." It is not a typical installment purchase. You will receive the purchase amount back in your account and can decide how to use it.
• Fixed debit interest rate regardless of the amount and term

Important to keep mind: Pay&Plan is BBVA's loan option with the highest debit interest rate year-on-year and should for this reason be used specifically for short-term, flexible financing needs.

Imagine you want to renovate your kitchen and need €10,000.

Instant loan:

• Net loan: €10,000
• Term: 60 months
• Debit interest rate: 4.99% p.a. Annual percentage rate: 4.06% p.a.
• Monthly installment payment: €184.12
• Total amount: €11,047.21

Cost: You will pay a total of €1,047.21 in interest over 5 years.

Imagine At the end of the month, there is a €400 shortfall in the account, and the electricity bill is due.

Overdraft facility:

• Credit limit: up to €500
• Debit interest rate: 9.95% p.a.
• Interest is only paid for the period of use.
• Cost example for 3 days of use: €400 × 9.95% p.a. ÷365 × 3 ≈ 0.33

For 3 days, only about 33 cents in interest will accrue. This shows that for very short bridging periods, an overdraft facility is inexpensive – with longer use, the cost increases significantly.

Imagine You bought a smartphone for €1,000 and now need the money for something else.

Pay&Plan:

• Amount: €1,000
• Term: 12 months
• Debit interest rate: 11.99% p.a.
• Monthly installment payment: approx. €88.85
• Total amount: approx. €1,066

Cost: Over the course of a year, you will pay approximately €66 in interest.

• Are you planning a major purchase?
  Instant loan: Plannable monthly payments, favorable interest rate, clear terms and conditions.
• Do you need money on short notice for an emergency, such as to ensure an important direct debit?
  Dispokredit: Immer verfügbar, aber teurer.
• Do you want to make a single purchase or be able to use money flexibly in the short term?
  Pay&Plan: Installment payment for payments you've already made. Short-term, flexible liquidity, but with a higher interest rate than with an instant loan or an overdraft facility.

Deciding on the right financing option should always fit your individual financial situation. Thanks to online banking, you can keep track of your income and purchases at any time and complete financing applications quickly and easily.

Whether with an instant loan, overdraft or Pay&Plan – with a clear understanding of your needs you will find the solution that best suits you and strengthens your financial flexibility, with favorable interest rates and no hidden costs.