Credit with negative interest – Get money when borrowed
July 25, 2019
There is wisdom in the credit industry that has become commonplace and simply applies unwritten laws. Anyone who takes out a loan has to pay a contractually agreed interest rate on this loan so that in the end more and more money is repaid to the lending party than was previously borrowed by the borrowing party. Due to the European Centrum Bank’s monetary policy, which was in the 0% sector, many banks already have zero-per-cent loans in their portfolios, so that the borrower could benefit from the neutral interest, meaning that virtually no interest on the loan had to be paid, However, the credit broker Avamas went one step further as the portal even offered credit with negative interest rates. The first credit with negative interest means to the borrower that effectively less money had to pay back to the lender than previously received.
Offer of the Bank
The offer seems too good to be true in the end. Anyone who is interested in being a loan-seeking person via the Avamas platform to Bank for a loan in the amount of 1,000 usd, has to pay back only 994 usd to the Bank thanks to the negative interest rates. A bank that gives away money to customers for a loan, this offer must have a catch. This offer does not have an obvious catch, however, there are restrictions. Managing director of Avamas, recently explained the loan with negative interest rates of -0.4 percent in the relevant press landscape. Of course, the credit with negative interest no one can get rich, as this offer per capita is “capped” to 1,000 usd and also linked to a period of 36 months. The borrower thus saves usd 6 through a loan available only for the month of July 2017. Saving, however, is better than unnecessary spending, but calls this offer also consumer advocates and skeptics on the plan.
No industry revolution expected
Consumer Protection was one of the first to comment on this offer and expressed concern that it would be a pure marketing campaign by Bank. Hausernau himself does not believe that Bank would set a proverbial stone in the credit industry rolling because ultimately no bank in the world would give away money. Moreover, Bank’s offer is based on the monetary policy of the BCE, as numerous banks for money capital, which they would “park” with the European Centrum Bank, have to pay penalty interest rates of exactly 0.4 percent. Thus, the negative interest loan offer of Bank could only be an action to counteract these penalties. However, since it is unlikely in the long term that the BCE will continue to pursue its loose monetary policy in this way, the trend in zero interest rates could very quickly turn itself into the opposite, making loans again more expensive. Although there are already several specialty stores and furniture stores that also offer deals with de facto negative interest rates in their portfolio, however, consumer protection advises every customer to study these offers. To be able to compare the loan offers better, it is advisable to use a loan calculator.
The first loan with negative interest rates
Be that as it is. The first credit with negative interest rates of Bank at Avamas is definitely a good opportunity for the loan-seeking people to provide themselves with a small loan and make appropriate purchases. However, since this offer is limited to the month of July 2017, the customer who finds this offer to be tempting should act as quickly as possible. The first credit with negative interest rates can be completed directly through the Avamas platform, so it can be expected that the platform will also greatly benefit from the onslaught on corresponding borrowers through its increased presence on the Internet. It could become a win-win situation for everyone involved.