Loan with minus interest – information, experiences & comparison

Despite low interest rates, banks demand overdraft interest on average of 8.5% for overdraft facilities, according to the Saversdome Bank. Credit portals, on the other hand, compare a still new model for borrowers: loans with negative interest rates. If you take out a loan of, for example, USD 1,000, you pay back less than the original loan amount with a fixed term or early repayment. But under what conditions of the providers offer cheap loans with negative interest rates of up to 5%? And why do lenders give loans with negative interest rates, on which, in contrast to the usual installment loans of banks with an average 6% interest rate, they earn nothing, but even pay extra?

What is a loan with negative interest?

What is a loan with negative interest?

A loan with minus interest is a loan based on an installment loan, for which interest is deducted from the loan amount rather than additional interest as with a conventional installment loan, so that the loan amount to be repaid for the borrower is reduced instead of increased .

For example, if he takes up the maximum amount of USD 1,000 as a net loan amount, he only has to repay USD 953.80 by the end of the term with a negative interest rate of 5%, for example. A term of up to 36 months can be agreed, so that only very low monthly installments of, for example, around USD 25 per month have to be paid.

What are the cheap loans suitable for?

debt loans suitable for?

Loans with negative interest rates are particularly suitable for planned expenses, because only borrowers with very good credit ratings (free of debt) receive the cheap loans. This means that they are not suitable for redeeming expensive overdraft facilities that bank customers with the appropriate credit rating usually do not use. If you can get by with a loan amount of up to a maximum of USD 1,000, you can use this amount as an alternative to the much more expensive overdraft facility of your checking account.

Interested customers should note, however, that for loans with negative interest rates, in contrast to bank installment loans, no residual debt insurance can be concluded together with the loan agreement. In other words, those who become insolvent due to a job loss or illness, for example, must continue to pay the installments regularly until the end of the term. It is also not possible to temporarily suspend installment payments.

What is behind the negative interest rate loans?

interest rate loans?

The question arises, why do providers give loans when they get back less than the loan amount and do not charge interest, but still give away money? Negative interest loans are a marketing tool to attract new customers. All the customer data is available to the provider when the customer applies, regardless of whether the loan is ultimately approved or not.

In addition, each borrower receives the loan from a provider only once. Further loan applications therefore fail and are rejected.



  • Inexpensive loan with up to 5% negative interest
  • Up to 36 months term
  • Low monthly installments
  • Suitable for planned expenses, not for the redemption of overdrafts
  • Available for clerks, workers & civil servants


debt loans

  • Very good creditworthiness required
  • No residual debt insurance available
  • Credit report entry (may be a hindrance when later taking out higher loans)
  • One-time lending per borrower per provider
  • Comparatively small loan amounts up to a maximum of USD 1,000

Conclusion on the loan with negative interest

money loan

Loans with negative interest rates can be seen as a kind of new customer bonus. The borrower takes out an installment loan and repays less than the net loan amount. This type of consumer credit can be compared, for example, with the financing offers of car dealerships or furniture stores, because ultimately the bottom line is a discount.

The intermediaries – in this case the credit portals – hope that new customers will also help borrowers in later times and generate a commission when they are concluded. In addition, they receive the coveted customer data free of charge, because the loan application contains all personal information and contact details.

If you want to apply for a loan with negative interest, you need an above-average credit rating. The approved loan is entered as a current loan with Credit report. This can possibly be negative when applying for later higher loans, because Credit report makes no difference in the amount of current loans, but in the number of individual loans.

If the customer has the necessary creditworthiness

He usually does not need the loan to replace an overdraft facility in his checking account. Although those who are constantly in the red pay a comparatively high overdraft interest, with a maximum loan amount for the low-interest installment loan of up to USD 1,000 this problem can often not be solved and the overdraft facility is exhausted far more. This means that the cheap loans are most suitable for planned expenses if there is no cheap financing from a seller. The amount is often too low to buy a car or furniture.

The monthly installments are, for example, the relatively low maximum net loan amount of USD 1,000 at USD 25, for example. There is no residual debt insurance or the possibility of suspending the installment payments for a certain period during the term. This type of loan must also be repaid on time and regularly. Otherwise, this has the same consequences as with an installment loan with positive interest and the remaining debt can fall due in the event of non-payment.

Leave a Reply

Your email address will not be published. Required fields are marked *