The historically low interest rate level is producing ever stranger blossoms. For about two years, consumers have benefited from negative interest rates as part of marketing campaigns.
Comparison portals advertise loans in the amount of 1.000 euros with a minus interest rate of one percent for a term of twelve months. Consumers are pleased on the one hand, on the other hand the question about the sense of such an action comes up again and again. We want to consider the topic "minus interest on loans" here a little more deeply.
The most important thing at a glance:
- Loans with minus interest rates are used as a marketing tool to obtain qualified customer addresses.
- Negative interest on a loan also means, fixed loan amount and term.
- The quotas for loans with negative interest rates are limited, as they are de facto eligible for everyone.
- The Kreditanstalt fur Wiederaufbau offers repayment subsidies in connection with KfW energy-efficient houses, which result in a negative loan.
Credit with minus interest noncommittally inquire
Here you can apply for a loan with negative interest rates in Germany free of charge and without obligation:
Why do banks offer minus interest rates?
Banks live from the fact that they get money in the form of interest for money they lend out. Finally, they have to pay for parts of the refinancing themselves again interest to the holders of call money, savings and time deposit accounts.
On the other hand, the providers must also continuously recruit new customers. Marketing measures, e.G. Television advertising, are expensive and only work according to the watering can principle. They are "poured out" in the hope of meeting one or two prospective customers.
But the real gold for a marketing department lies in qualified address material. For a bank or an intermediary, the data of a consumer who has already taken out a loan in the past constitutes such qualified address material.
Very few people need a loan only about 1.000 Euro. As a rule, the need is higher at a later date. On the one hand, the "negative interest customer" can be targeted with personalized advertising in the future. On the other hand, the borrower keeps in the back of his mind "with them I already had a super offer, I'll go there again".
Negative interest rates on a loan are therefore not a good thing on the part of the credit institutions, but simply the possibility of getting qualified customers more cheaply than through anonymous advertising in the media. In addition to the address data, the lenders also know the creditworthiness of the customer at that moment. So you can make possible personalized marketing measures much more customer-specific.
For example, low-interest offers can be targeted at borrowers with good and very good creditworthiness. On the other hand, there are credit offers with a generous interpretation of the creditworthiness of customers with a less good score.
Once the data from such an advertising measure is available, it can be used in a targeted manner in the future.
Interim summary
Negative interest rates on loans offer banks the best possible conditions as a marketing tool for obtaining qualified data sets selectable by target groups for subsequent advertising measures.
Exception Kreditanstalt fur Wiederaufbau
Builders or real estate buyers who finance part of their construction with a loan from the Kreditanstalt fur Wiederaufbau, or KfW for short, also benefit from minus interest rates. However, this is not a marketing gimmick, but a concrete subsidy program.
The speech is from the promotion program 153, energy-efficient building. This supports borrowers in implementing the "KfW Energy Efficient House" standard. The loan is granted in an amount of up to 120.000 euros is disbursed and carries an interest rate of 0.75 percent. But: Depending on the degree of energy efficiency achieved, the borrower receives a repayment subsidy of up to 18%.000 euros and a maximum of 30.000 euros, depending on the loan volume. In the overall calculation over the ten-year fixed-interest period, this pushes the interest rate into negative territory.
Thanks to the repayment subsidy from KfW, builders and purchasers benefit from de facto minus interest rates under certain conditions.
For whom is a loan with minus interest worthwhile??
A loan with minus interest is worthwhile for everyone. 1.Borrow 000 euros and pay back 950 euros means to have earned 50 euros. As is well known, the Federal Minister of Finance, Olaf Scholz (SPD), has been following this principle for several years now.
In uncertain times, institutional investors are so eager to obtain top-quality government bonds that they are willing to pay money for them. Assuming a government bond with a two-year term offers an interest rate of 0.5 percent. On the other hand, however, the issue rate is 102 percent of the nominal value.
With a denomination of 100.000 euros, this means receiving interest twice of 500 euros each, but having paid an extra 200 euros. Redemption is at the nominal value of the bond. Olaf Scholz earned 100 euros on his loan.
Thus, a loan with negative interest rates does not raise the question of whether one needs it. You take it if you can get it. Against the background of this consideration on the part of the customers it is understandable that the quotas for such measures are usually limited. In addition, there are also the strict fixed requirements in terms of amount and term.
Unfortunately, those with larger credit needs do not enjoy these loans. He remains only the way to get a credit as favorable as possible. The possibility for it offers again the credit comparison portals, which make a direct comparison of the offerers possible.
Minus interest is worthwhile for everyone. Conversely, the federal government still earns from borrowing by issuing bonds.
What to look out for in a loan with minus interest rates?
If there are negative interest rates on a loan, there are few starting points to which borrowers must pay attention. All general conditions are fixed. A point of view could be the possible early repayment penalty if you repay the loan early. But this again makes no sense, because the return would be reduced, which you get with the negative interest on a loan.
The situation is different if a loan is to be taken out at a later date. To trust here blindly on the offerer, who already assigned a credit with minus interest in the apron, would be a mistake. It is possible that the general conditions for a loan with debit interest are rather customer-unfriendly. However, it is always the same aspects that, apart from the interest rates, come into play when choosing a loan.
Early repayment fee
If you already know at the time of taking out the loan that you want to repay the loan in full or in part during the term, you should pay attention to the early repayment penalty. Some banks still charge this.
It amounts to one percent of the repaid remaining debt if the remaining term is more than one year. If the remaining term is shorter, it is still 0.5 percent.
Installment break
Many, but not all banks, offer an installment break. Families with children in particular know the situation when the bank account is at its limit in the run-up to Christmas. It is all the more practical if the bank already contractually suggests installment breaks. The borrower then no longer has to negotiate, but simply exercises his right.
Two-thirds interest
The two-thirds interest rate is a mandatory requirement if the bank charges interest based on creditworthiness. This interest rate states what maximum interest at least two-thirds of the borrower must pay.
Assume that the range at Bank A is three to ten percent interest p.A., the two-thirds interest rate is four percent. Bank B offers interest rates between two percent and six percent. Bank B is more favorable at first glance. However, with a two-thirds interest rate of five percent, the probability increases that the borrower will have to pay more than with Bank A, despite a lower minimum interest rate.
Cancellation period
It may well happen that the borrower does not need the loan after all or has found a more favorable one. The law provides that consumers can withdraw from a purchase contract within 14 days. This also applies to credit agreements. Some banks, however, offer an extended revocation period of four weeks.
Ideally, the bank gives a best price guarantee. If the borrower proves that another bank offers more favorable interest rates for absolutely identical conditions, the bank corrects its offer accordingly.
Digital or paper?
For more and more borrowers, it matters whether they still have to copy account statements and go to the post office to take out a loan, or whether the loan application is completely digital.
In this case, it is literally no longer necessary to leave the sofa to take out a loan. The credit check is carried out as part of the digital account check, the legitimation in the VideoIdent procedure and the signature by a qualified digital signature.
The advantage of a digital loan process is also that the money is usually in the account on the same day.
Credit despite Schufa
Some banks exclude from the outset in the acceptance guidelines that a loan is granted with a negative Schufa entry. Other institutions act somewhat more flexibly. They differentiate very well, why there was a Schufa entry. They also check whether return debit notes have occurred once, or appear as regular components in the booking items. However, a loan is generally not possible if the applicant has hard Schufa characteristics.
Flexible term and loan amount
Unfortunately, only a few credit institutions are so far that they allow a monthly exact term, for example 35 or 57 months. Mostly the gradations are possible only in steps of twelve months.
The same applies to the loan amount. Who 13.490 euros needed, missing at 1.000 increments either 490 euros, or he must pay 14.Fund €510,000, which is €510 more than necessary. However, some banks already take this into account with a stepless selection of the loan amount.
When taking out a traditional loan, borrowers should think about what parameters are important to them beforehand. This is the only way to find the best individual loan.