Negative Interest Rate Loan Details

Effects of Negative Interest Rates

Interest rates are often defined as the price paid to borrow money

It actually sounds too good to be true: you borrow money from a bank and end up paying less less than you originally borrowed. For some time now, various comparison portals have repeatedly advertised this exact model, also known as a negative interest rate loan. Can banks actually give money away?

The answer is yes, but. If you want to apply for a negative interest loan, you should be aware that credit institutions are primarily concerned with one thing: advertising. Still, a negative interest rate loan can be a legitimate way to get a little cash injection in the short term. Individual calculation examples for loan issues can be found in COMPUTER BILD's loan comparison.

The contents of this article:

»Negative Interest Rate Loan: How It Works»Framework conditions for a negative interest loan

»You pay negative interest loans with your data
»Negative interest rate loans: The most important things summarized
Negative Interest Rate Loan: How It Works

In most cases, a bank does not directly grant a negative interest loan, but an intermediary platform. This offers such loans in the amount of around 1,000 euros, rarely for higher amounts. Depending on the platform and the current campaign, savings of five or more percent are advertised. But how can that be? Quite simply: If you look at the small print in the conditions for borrowing, the debit interest with two to four percent is often in the normal range of a classic installment or mini loan. However, the so-called effective interest rate - what you actually end up paying as interest - is negative. However, this negative interest only arises because the platforms take the difference plus interest for you and pay it to the bank. This procedure is often advertised under the term "interest bonus" by Smava, Finanzcheck and Co.

Framework for a negative interest loan

So no money is given away, just divided up differently. The feeling of having to pay less than to have received is then used for clever marketing. The platforms pay for it, but hope for many new customers, who may eventually get larger, more lucrative loans via the respective portal. However: Not everyone can just get a negative interest loan like this. The following requirements usually have to be fulfilled:

In addition, the loan amount is generally limited to a maximum of 1,000 euros and the offer may only be used once per person. The term is often relatively long at 24 months and can be shortened by paying the remaining debt in one sum - however, the favorable conditions usually expire. In order for the negative interest to take effect, you must adhere to the full term. Also keep in mind that a lot can happen within this term and that the loan amount should be secured in the event of financial bottlenecks (e.g. due to unemployment) or that you should have a plan on how the installments can still be paid on time.

Negative interest and Schufa entry

If you meet the conditions listed above, there is a good chance that you will be granted a negative interest loan. Note whether and how the application for such a loan is noted in your Schufa file: Some providers advertise that - regardless of whether the application is rejected or accepted - no entry is made at Schufa. If an entry should be made, you should be aware that other banks may be deterred by such notes if you want a larger loan: Especially if several such requests are noted in your Schufa file, this can (!) Have a strange aftertaste left with lenders. The emphasis is on, but need not be. However, you should keep the topic in mind if you plan to ask for a negative interest loan on different platforms.

You pay negative interest loans with your data

An even more important point: the platforms are primarily about advertising - and thus about your data. When applying for a loan with negative interest, you usually have to provide information about your income, the amount of your rent, current insurance and financial obligations. You often even have to grant access or insight into your online banking. Attention: Never give your online banking access details directly to the lender. Reputable providers have developed a safer way to gain insight into your current finances, in which you also enter the data, but they remain with you. Everyone has to decide for themselves whether you want to disclose this still very intimate data for a comparatively small loan amount.

Basically, many of the comparison portals then use your data to send you personalized advertising - regardless of whether the application for a negative interest loan was granted or rejected. A cheaper insurance or an attractive installment loan, of course with corresponding interest: If the providers do not earn from you through the negative interest loan, you would of course like to find other ways afterwards.

Negative interest rate credit: the most important things summarized

A loan with negative interest is a plus for you from a purely financial point of view, but not in vain, because you pay with an insight into your personal financial situation. For people who do not mind and who also have a first-class credit rating, this route can still be a good way to get a short-term financial injection. However, with a maximum loan amount of around EUR 1,000, the loan is hardly suitable for larger investments and with a term of mostly 24 months, the liability is rather long. And: People with a poor credit rating who, purely for statistical reasons, need short-term financial support much more often fall straight through the grid with this type of loan. However, there are other ways for you to get a loan despite Schufa if necessary.
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