Interest-free loan 2019 »Low and negative interest rates in the test!

Children are not always easy to explain why there is interest for saving. The bank keeps the money for its customers – does not that cost rent? In the meantime one has to say: sometimes already.

At auctions of Bunds were partially achieved negative returns, so the Minister of Finance got money for lending money. For private investors, an interest-free loan is usually still a dream.

Getting loans – or only at very high interest rates – as compensation for the risk of landing in purgatory.

Getting loans - or only at very high interest rates - as compensation for the risk of landing in purgatory.

If you lend money to one of my people, to a poor person next to you, then you should not act like a usurer on him; You should not take any interest from him. 

Many bankers were therefore Jews. In the Fifth Book of Moses, the prohibition of interest is lifted for foreigners, understood by many religious scholars all non-Jews. Christians were therefore allowed to take an interest. Over time, however, the interest ban was relaxed, especially in the Protestant areas. The Catholic Church officially lifted the ban on interest only in 1830.

Today, the demand of the Old Testament is reality, at least for some states. There were even negative interest rates, especially for Swiss investors, but also for German government bonds.

Real estate loans the case, because here the house serves as security. Those who can finance at least 40 percent of the value from equity pay very little, because the bank then has the certainty that even with a significant loss of value still enough income from the sale of the house to get their money back. 

For the purchase of real estate, the interest rates are particularly low, especially if more than 40 percent can be financed from equity.

For installment loans, the interest rate depends above all on the credit rating. Anyone who has a high and secure income and little debt, receives particularly favorable conditions, such as civil servants.

However, these loans are not interest-free – and they probably will not. Because a big advantage of government bonds is that the owners can sell them in the short term, if offer interesting investment opportunities.

After all, they can not afford to make long-term losses on their investments. Especially the over-50-year-olds have been able to do a lot of traveling in the 1970s and 1980s due to the good economic situation with stable employment and high and steadily rising salaries. Parents, uncles or aunts can therefore be a good address.

The loan should be recorded

The loan should be recorded

Here, too, a loan agreement should be concluded, which records the amount of the loan and indicates when it must be repaid in what installments. The freedom of interest should also be recorded.

If the loan is repaid in one fell swoop, the debtor can also issue a bill that the lender can redeem at the bank on the due date, such as a check. However, this redemption is usually associated with fees.

In any case, debtors should ask themselves whether the lower interest rates are worth the problems that  can result from loans within the relationship.

The credit of GIN (formerly Metabank) is not quite interest-free, but at a remarkably favorable interest rate

Only social service subscribers have an interest-free loan from the Jobcenter or the Sozialamt. Strictly speaking, this is not a loan but an advance on subsequent payments. However, the authorities are required to provide this service only in emergencies, so they are not a substitute for an installment loan.

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