Anyone who takes out a loan must repay it to the lender for the agreed loan term, the entire amount in installments plus a premium, the interest. This is the ever-valid function principle for credit transactions. But in the last 2-3 years many a loan offer turned this system completely upside down. Because the borrower does not pay back the full loan plus interest, but less. The model is called “minus-interest-credit”, which means in plain language that as a borrower you get more money than you have to repay. And these minus-interest loans are taking on increasingly absurd features. Initially, interest rates were still at a level of 0.4 to 4 percent, so in 2019 loan offers with up to minus 20 percent already appeared. How can that be? Are the lenders something like Samaritans? What is really behind these loan offers?

Everything just a marketing gimmick?

At least it seems more and more obvious that these loans are anything but easy to get. Or different: The award criteria are so hard that you may only be awarded to a group of people with the highest credit rating and other positive characteristics. Which is basically clear that this is a target group, the need for loans is unlikely to exist.

Minus-interest loans: complaints pile up

So all just a marketing gimmick? Is it not possible for suppliers to give away these loans you are subsidizing? The suspicion is quite obvious, even if the operators of the portal on demand emphasize that you have these loans actually assigned to people, so these come to pay. Only: It is hardly comprehensible to outsiders.

What is understandable, however, is that consumers’ complaints about these negative interest loan offers are piling up at corresponding bodies of consumer protection associations – to a not inconsiderable degree. And those consumer advocates, after evaluating those unending complaints, come to the conclusion that those loan offers in a high percentage serve a different purpose, the acquisition of personal data by borrowers.

Credit against personal information – maybe

Credit against personal information - maybe

And that’s what it’s ultimately about, because data is worth gold for online business models. The more individual data about a consumer, the better. Because these data provide with appropriate analysis valuable information about purchasing power, buying interests, levels of activity on the Internet, family situation and so on. In this way, interest-oriented marketing campaigns with high conversion rates can be constructed for your own online business and also monetized in the context of partner offers – assuming the data subject’s consent.

A procedure that the consumer advocate Kerstin Schultz confirms:

“Such data is worth gold – and therefore a rather high price for the consumer, the low interest rate offer is still so tempting.” And she warns that consumers should be aware that they may have already paid with their sensitive data when making the loan request.

Credit requested, transfer data – and then?

And so, the business with the data seems to work when requesting a minus-interest loan offer:

When such a loan is requested and the required personal data are transferred, the credit comparison portal not only transmits a single loan offer but numerous alternative loan offers. However, the applicants have never requested and in some cases are very different from the applicant’s credit requirements – with heavily modified terms, loan amounts and maturities.

Which concludes that the information provided by the consumer on the loan request as well as the personal data not only – as actually desired by the potential borrower – were forwarded to the provider of the negative interest loan.

What many consumers seem to overlook in the application process, therefore, is that by submitting the application for such an online loan you also agree to further processing and to passing the data on to third parties.

In this respect, the Council applies: Before submitting a request for a negative interest rate loan, provide detailed information on the award criteria of the loan – if necessary via a direct inquiry with the customer service of the provider. Furthermore, read carefully the so-called declaration of consent for data processing as well as data usage.

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