Reasons for a loan
There are numerous reasons why people decide to take out a personal loan. Such financial support can often provide temporary relief in various life situations. Be it for the realization of a long-awaited project, coping with unexpected expenses, or consolidating existing debts – if you need money quickly and on a large scale, it can be worthwhile applying for a loan in Switzerland.
But in which situations can taking out a loan actually make sense? What requirements do you need to fulfill in order to obtain a personal loan and what credit options are available?
Does it make sense to take out a loan?
In various life situations, taking out a loan is a good way of obtaining additional money when existing funds are not sufficient. Sometimes these situations are foreseeable, such as when building a house, buying an apartment, or financing a car.
In other cases, unforeseen expenses may arise, such as urgent repairs. Financing your own further education or the education of your children can also represent a financial burden and justify taking out a loan.
Borrowing can therefore make sense if the loan is used to achieve long-term goals, such as financing an education or investing in a home.
However, the decision to take out a loan should be carefully considered. You should realistically assess your own financial possibilities and consider the long-term effects of a loan. This includes the monthly installments, which must fit into your budget so that the loan does not lead to excessive debt.
Can everyone get a loan?
Lending in Switzerland is regulated by law. The Swiss Federal Law on Consumer Credit lays down strict rules to protect consumers from over-indebtedness. Furthermore, banks themselves also have their own criteria that are taken into account when assessing loan applications.
Whether a loan is approved and on what terms therefore depends on various factors, including your credit rating, income, and financial situation. While some people can easily obtain a loan, others may find it more difficult to obtain financing.
When you apply for a loan, the bank primarily checks your creditworthiness and credit standing. Creditworthiness refers to whether you can repay the loan amount within the agreed term. If the loan installment is unaffordable and there is a risk of over-indebtedness, no loans may be granted to private individuals. This is clearly stipulated in the Federal Consumer Credit Act.
Credit rating, on the other hand, is determined based on your previous credit history and reliability. A positive credit rating, regular income, and a solid financial history can increase your chances of being approved for a loan.
What do you have to do to get a loan?
In addition to creditworthiness and credit standing, you as a borrower must also meet other minimum requirements in order to be able to take out a personal loan in Switzerland:
- Age of majority: You must be of legal age to apply for a loan. This means that you must have reached the legal minimum age of 18 to be eligible as a borrower.
- Swiss citizenship or residence permit: Most banks in Switzerland also require either Swiss citizenship or a valid residence permit. In this way, your identity can be verified and it can be ensured that you are legally living in Switzerland.
- Residence in Switzerland: Another criterion is a permanent residence in Switzerland. This serves to ensure your accessibility and increase the repayment capacity of your loan.
- Good credit rating: A good credit rating is also crucial for obtaining a loan. This means that you should have a positive credit history that demonstrates your ability to repay debts on time. Lenders usually check your creditworthiness using credit scores and credit checks.
- Regular income: Last but not least, a stable employment relationship with a regular income is also an important criterion for obtaining a loan in Switzerland. It shows lenders that you have the financial means to make the monthly loan installments. Lenders generally expect a certain minimum income to guarantee your creditworthiness.
By meeting these minimum requirements, you increase your chances of obtaining a personal loan in Switzerland. You also show lenders that you are able to repay the loan responsibly.
However, before you apply for a loan, it is advisable to compare various offers and find out about the conditions and costs. Miro Kredit AG is at your disposal as a reliable credit broker to help you find the right loan and support you at every step of the process.
What types of credit are there?
Depending on the reasons for taking out a loan, there are various types of loans available to you. The following loans are available for private individuals:
- Mortgage loan: Mortgages are used to finance real estate, with the property itself often serving as collateral. In addition, mortgage loans generally have longer terms than other loans.
- Lombard loan: This loan makes it possible to deposit liquid assets such as securities as collateral in order to borrow money.
- Loans: Loans are general loans that can be used for various purposes and are often granted by banks or financial institutions.
- Overdraft facility: An overdraft facility is the overdraft limit on a current account that enables short-term liquidity shortfalls to be bridged.
- Credit cards: Credit cards are also a type of loan where borrowers have the option of making payments up to a certain credit limit, with repayment being made at a later date.
- Peer-to-peer lending: This type of loan is granted from private individual to private individual without the involvement of traditional financial institutions.
- Personal loan: Personal loans are granted by a bank or financial institution to a private individual and can be used for general consumption purposes or specific projects.
There are further subcategories under personal loans:
- Consumer credit: A consumer credit is a personal loan regulated by the Consumer Credit Act and is used specifically for consumer spending such as the purchase of goods or services.
- Small loan: The term “small loan” is rather informal, but is often used for loans with low loan amounts.
- Earmarked loans for education or training: Among personal loans, there are special loans that are used for educational purposes such as education or training and do not fall under the Consumer Credit Act.
- Renovation loan: Last but not least, there is the renovation loan, which is used specifically for the renovation or modernization of a property to cover the costs of construction work.
The type of loan you ultimately decide on depends largely on your financial goals, your budget, and your personal reasons for taking out a loan. However, before you decide on a particular loan, you should inform yourself in detail and examine various loan options. As a credit broker, Miro Kredit AG always has the right financing solution for your needs and requirements.
How many loans can you have?
In recent years, the number of private loans has risen, which has led to an increase in debt. You may ask yourself: How many loans can you take out in Switzerland at the same time?
There are many people who have several outstanding sources of debt such as loans, leasing contracts, credit cards, and mortgages. However, there is actually no legal requirement for the maximum number of loans that can be taken out in Switzerland. The law on consumer credit merely states that the granting of credit is prohibited if it leads to excessive indebtedness (Art. 3 LCSI). It is therefore perfectly possible to take out several loans.
If you also want to take out several loans, you should consider combining them into a single solution. In this way, you can obtain more favorable conditions such as a lower interest rate and possibly even reduce the loan rate.
Nevertheless, it is important to handle credit responsibly and ensure that the total burden of repaying all loans does not exceed your budget. Excessive debt can lead to financial problems and significantly affect your credit rating. You should therefore carefully review your existing financial obligations before deciding to take out further loans.
5 good reasons for taking out a loan
Whether it’s to fulfill a long-cherished wish, provide quick liquidity or cover an unforeseen expense – taking out a loan in Switzerland is sometimes simply essential. It is advisable to use the services of a credit broker to find a favorable loan that best suits your situation. Below we have compiled some of the best reasons for taking out a loan.
1. Bridging financial bottlenecks
Around 34% of all Swiss people have already taken out a personal loan or online loan in the past – most of them to bridge financial bottlenecks. Unexpected bills or sudden expenses for repairs that exceed your budget are a typical reason for applying for a loan. If, for example, the car is broken but is needed to get to work every day, a personal loan is the solution to the problem.
A solution that does not have to be more expensive than absolutely necessary: With a
loan comparison by Miro Kredit AG, countless offers for a loan in Switzerland can be compared with each other in the shortest possible time and a loan application can be found that meets individual requirements in terms of financing.
2. Finance training
It is well known that investing in education pays the best interest. So it seems more than just profitable to finance your education with a loan. This is one of the most common reasons for loan applications, especially among under 35-year-olds. This usually involves comparatively high loan amounts of up to CHF 20,000.
The main advantage of such a loan from Switzerland is that students and trainees can focus better on their studies or training and the path to successful completion is easier. Taking out a loan through a credit broker is particularly recommended here due to the often lower income of trainees and students.
3. No additional fees for loan brokerage
Many consumers fear having to pay additional fees when applying for a loan through a credit broker. However, this concern is unfounded, as Article 35 of the Federal Law on Consumer Credit stipulates that no fees may be charged for arranging a personal loan or online loan. Reputable credit brokers such as Miro Kredit AG can be recognized simply by the fact that they do not charge any processing fees for a loan application or any payments in advance.
4. No negative influence on the credit scoring
Credit brokerage has another advantage. Multiple applications and rejections for a personal loan or online loan by conventional means would be registered by the ZEK and have a negative impact on the scoring. Banks are obliged to report every loan application and every loan request to the ZEK. This can lead to subsequent rejections, even though the applicant has an impeccable credit rating. A credit broker, on the other hand, checks the applications very carefully in advance in order to avoid negative entries.
5. Simple application
Finding and applying for a suitable loan is very easy thanks to a professional loan broker like Miro Kredit AG. Customers can use our loan calculator right from the start. Here you can simply enter the loan amount and the desired term and a few seconds later you will receive a monthly installment for the desired personal loan. To apply, you only need to attach a few documents, such as your most recent payslip.
The entire process can be completed online and in a short time, which is why everything can be done from the comfort of your own home. From then on, the loan broker takes care of the rest and sends the applicant an offer. They also contribute their extensive experience in the field of loans and advise customers on offers that are particularly advantageous.
Such advice is particularly useful when it comes to replacing one or more existing loans with a more favorable one. As a borrower, you can save a lot of money and effort with an online loan or personal loan by consolidating existing liabilities, e.g. from credit card accounts.
Experience pays off
Experienced credit brokers such as Miro Kredit AG have been active in this business for many years and have a correspondingly high level of expertise with regard to loans from Switzerland. Thanks to their Miro Kredit experience, they know the banks’ criteria with regard to budget and approval in detail and use this knowledge to the advantage of their customers.
For example, there are banks that will not grant a loan despite a solid budget and good credit rating. A credit broker will therefore only send the request directly to the bank that promises the best chance of success after a detailed check.
He also knows how the applicant’s budget can be optimized to further increase the chances of a positive credit decision. For example, the partner’s salary can be taken into account or the actual monthly costs can be specified, thus enabling a higher allowance. This in turn results in a higher loan amount or lower interest rates, as the bank recognizes a lower credit risk.
Private loan calculation example:
Loan amount: CHF 10,000 without insurance. Repayment period: 12 months
Interest (including costs) amounts between CHF 240.50 and CHF 574.25. Effective interest rate 4.5% – 11.95%. Possible loan repayment period from 12 to 120 months
Processing fees: CHF 0.-. Granting a loan is prohibited if it leads to over-indebtedness (§ 3 Unfair Competition Law – UWG)