Currently, companies are competing for the cheapest installment loan. Check24 and Smava are undercutting each other - with interest rates of minus five percent. Pricing expert Prof. Hans-Christian Riekhof views this critically.

Installment Loan: Are Negative Interest Rates Sensible for Credit Portals?

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Currently, companies are competing for the cheapest installment loan: Check24 and Smava are undercutting each other and have now reached interest rates of minus five percent. Customers who receive a loan of 1,000 € only have to repay 950 €.

Pricing expert Professor Hans-Christian Riekhof said: “I would be particularly interested in how many of these loans are actually taken up. They are usually only given to customers with very good creditworthiness. And many credit-financed purchases, whether for home furnishings or the used car, are significantly above the amount of 1,000 €. So this is likely to have only a very limited actual significance.”

Installment loan with an interest rate of minus 5 %: What logic is behind it?

One has to ask what logic is behind these offers. “Why do the providers subsidize consumer credit?”, asks Prof. Riekhof and immediately gives his assessment: “It’s all about attracting attention in the media. The Handelsblatt recently reported about it on a whole page – you can’t get free advertising for your own company any easier. However, how long this effect lasts is another matter.”

 

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