What’s the Difference Between Pay & Split and Overdraft?

With Pay & Split, you get a credit line of up to 250,000 ISK for three months, repaid in three equal payments. You pay the first portion of the transaction immediately, while 75% of the transaction amount is loaned to you and repaid in three parts on the first business day of each month.

An Overdraft comes with a higher credit limit of up to 500,000 ISK and lasts for six months from the day you get it. You can either repay the overdraft gradually with a plan to reduce the limit or keep it open without reducing the principal during the loan term.

Regardless of the type of overdraft you choose, you must reapply after six months if you want to continue having an overdraft on your account.

Since Pay & Split involves a smaller loan amount and is repaid in three equal payments, it is available to anyone with a credit rating of C1 or higher and is sharing additional data (according to Credit Info). However, to apply for an overdraft, you need a credit rating of B2 or higher.

It is possible to have both an overdraft and Pay & Split transactions, as well as applying for an advanced salary.