If certain countries practice negative and therefore remunerative credit interest rates for borrowers, French law excludes such a practice in France. An editorial over at http://cooling-station.net/the-best-places-to-apply-for-your-loan/
It must be said that they do not stop falling to thresholds that have never been observed so far. While May marked the end of an all-time high, with an average rate of 1.29%, banking establishments were even more aggressive in June with 1.25%. Many households are therefore launching their real estate projects.
Credit rates are one of the key topics of this summer period
At this rate, some might believe that lenders will soon extend credit at negative rates. But is it really conceivable to see such a situation materialize in the months or years that follow? In this case, the French are still far from going into debt with a bank and being remunerated.
From a legal point of view, the tricolor civil code declares that the borrower who reimburses a credit must obligatorily return the capital in full, but also that banks are prohibited from lending at a loss to individuals.
If singular cases have already taken place in the Scandinavian countries, in particular in Denmark, to earn money after having made credit is illusory in France. Exceptional rates can go down further, but they will never make money for someone in debt with a loan.
Negative rates for bank savings
Conversely, it is indeed banking establishments that are affected by negative rates. But these are extremely penalizing for them since they affect equity. Indeed, due to the monetary policy practiced by the European Central Bank, banks save the money they have at negative interest rates set at -0.4%.
This deficit savings mechanism acts as a lever to encourage players to inject their funds into investment projects by individuals and professionals in order to create growth.
In Switzerland, however, institutional investors have succeeded in obtaining remuneration in exchange for credit. In what way? Because banks lose less by lending at negative rates than by making deposits with their central bank.
Not managed by the European authorities, Switzerland has its own monetary policy which is relatively similar to that in force on the old continent. Concretely, it is also based on a more penalizing deposit rate of -0.75% which encourages banks to grant credits at interest-bearing interest rates which are less costly for the account of a borrower whose solvency is important.
- How to go on vacation on a tight budget?
- How many years of income to buy housing in 2019?