Refinance your overdraft in Germany
Your German current account has been in the red for months and the overdraft interest keeps running. To refinance your overdraft, you replace the Dispo with an installment loan. The amount stays the same, but you pay a fixed monthly installment and you know when it ends. This page walks you through the steps, tells you when it makes sense and what the law says about your rights.
· Checkalle Editorial
Key Takeaways
- The problem: a permanently used Dispo is one of the most expensive forms of credit. The rate is variable and there is no repayment plan.
- The fix: take an installment loan for the overdraft balance, bring the account to zero, pay fixed monthly installments.
- Worth it when the minus has been there for months. A few days before payday is not a case for a loan.
- Your right: you may clear the overdraft at any time. A prepayment penalty is excluded by law (section 504 BGB).
- Afterwards: lower the overdraft limit or cancel it, or you will slide back into the red next to the loan.
Compare refinancing offers
Enter your overdraft balance as the loan amount. The comparison runs as a SCHUFA-neutral conditions request; your conditions depend on your creditworthiness and only appear in the actual offer.
How to refinance your Dispo
Refinancing an overdraft means an installment loan with a fixed payment replaces the variable-rate Dispo. Four steps, then the minus is gone.
There is no special product called overdraft refinancing. You take out a regular personal loan and use the money to bring your current account back to zero. Your own bank does not need to approve anything, and the loan can come from any bank.
- 1
Compare loan offers for your overdraft balance
Pick the offer with the lowest effective annual rate and a term short enough to finish, but long enough that the installment fits your budget.
- 2
Sign and clear the overdraft
Once the loan is paid out, transfer the money to your current account and bring the balance to zero right away.
- 3
Lower the overdraft limit
Ask your bank to reduce the Dispo to a small emergency buffer, or cancel it. Otherwise the minus comes back next to the loan.
- 4
Pay the fixed installments
Same amount every month. When the term ends, the debt is gone.
When refinancing makes sense
An overdraft is meant for short gaps. A few days in the red before payday cost little and do not need a loan. It looks different when the balance has been negative for months and your salary no longer clears it. Then the variable overdraft rate keeps running with no end in sight, and that is the case for refinancing. According to Finanztip, banks only grant installment loans from a certain minimum amount, so a very small overdraft does not qualify.
The German banking association describes the same approach in its guide Paying off your overdraft. The Deutsche Bundesbank publishes the average overdraft rate for private households every month in its MFI interest rate statistics; the German version of this page quotes the current figure. Your own bank sets its own rate, and it can sit well above the average.
After the refinancing
- Lower the Dispo limit. Otherwise you build up a new overdraft next to the loan and pay twice.
- Bundle several debts. Overdraft, older installment loans and a credit card balance can go into one loan with one installment.
- German version of this page: Dispo umschulden. General loan comparison: Credit compare Germany. Loans for newcomers: Personal loan for foreigners. Monthly payment examples: 5,000 euro loan monthly payment.
Your rights under German law
- 14-day right of withdrawal for the new loan, no reasons needed (section 495 with section 355 of the German Civil Code, BGB).
- No prepayment penalty on the overdraft. For an arranged overdraft facility, section 504 (1) BGB excludes the claim (German text).
- Early repayment of the loan at any time, in full or in part (section 500 (2) BGB). A prepayment penalty is only possible with a fixed borrowing rate and is capped by section 502 (3) BGB at 1 percent of the amount repaid early, or 0.5 percent if no more than a year of the term remains, and never more than the interest still due until the agreed end (German text).
- Conditions request, not a credit application. The comparison runs as a request for credit conditions. SCHUFA states in its announcement of 16 March 2026 (German) that credit, leasing and mortgage requests will be score-neutral in the new SCHUFA score.