From how many years can I take out a loan?
In Switzerland, age plays a central role when taking out a loan. In principle, only persons of legal age, i.e. people who have reached the age of 18, may take out a loan. This rule applies regardless of the type of loan – be it a personal loan, a car loan, or a mortgage loan. The minimum age of 18 is stipulated by law in Switzerland and forms the basis for credit eligibility.
In addition to the minimum age, however, many credit providers set other age limits that may play a role in certain cases. Some credit institutions set a maximum age for granting loans. This is particularly relevant for longer loan terms, as is common with mortgages, for example. Lenders want to ensure that the borrower is still able to service the installments in old age.
In this article, you will learn everything you need to know about the requirements for taking out a loan and the special regulations for young people and older borrowers.
Legal regulations and conditions of the credit institutions
Lending in Switzerland is subject to strict legal regulations designed to protect both borrowers and lenders. One of the most important regulations is the Federal Consumer Credit Act (KKG). This law stipulates the conditions under which credit agreements may be concluded and what information must be provided to the borrower.
In Switzerland, loans are only granted to people who fulfill certain requirements. These include the borrower having a permanent residence in Switzerland and either having Swiss citizenship or a residence permit (B, C). In addition, the borrower must be of legal age when the contract is concluded, with some lenders only granting loans from the age of at least 20.
Additional restrictions often apply for people up to the age of 25, such as higher interest rates or a credit limit. As a rule, the borrower must not be older than 70 at the end of the contract. A regular income and a sufficient budget surplus are also necessary to ensure repayment of the loan.
Creditworthiness according to the Credit Consumption Act
The Credit Consumption Act (KKG) is a key instrument for regulating the credit market in Switzerland. It not only defines the rights and obligations of lenders but also the creditworthiness requirements for applicants. Creditworthiness is a decisive criterion that determines whether or not a loan is granted.
According to the KKG, an online loan is only permitted if repayment is possible within a maximum of three years without the borrower becoming overindebted. This regulation is intended to prevent consumer loans from becoming a long-term financial burden that the borrower is unable to cope with. For this reason, not only the current income but also the applicant’s overall financial situation must be taken into account when checking creditworthiness.
The KKG therefore plays a key role in ensuring responsible lending. It protects consumers from over-indebtedness and ensures that credit institutions only grant loans if the applicant is actually able to fulfill the obligations.
Miro Kredit AG supports you in finding the best loan conditions for you by comparing a large number of offers and providing you with the most important information in a transparent manner. If you have any further questions about taking out a loan or need support in choosing the right loan, our experts will be happy to help you.
Special conditions of the credit institutions
Whether you want to know when to apply for a home loan or how much money you can get from the bank, credit institutions often offer special conditions aimed at specific target groups or life situations. These special conditions can be of interest to both young people and older borrowers and can include, for example, more favorable interest rates, more flexible terms, or special repayment modalities.
However, as already mentioned, there may also be restrictions. Banks are particularly reluctant to approve loans for younger people.
Young people
For young people just starting out in working life, taking out a loan can be an important financial decision. It is often about furnishing their first home, financing a car, or covering further education costs.
Due to their age and often limited professional experience, young people under the age of 25 generally have less collateral to show. This can mean that the loan conditions, especially the interest rates, are less favorable than for experienced borrowers.
However, many credit institutions recognize the potential of young customers and therefore offer them special conditions. These can take the form of lower introductory rates, bonus systems, or the option to flexibly adjust the loan as income increases.
Another advantage for young people can be the support of parents or other relatives who can act as guarantors. This improves the borrower’s credit rating, which in turn can lead to better conditions.
Older people
Older people who want to take out a loan often face different challenges than younger borrowers. While in many cases they have a stable financial situation and may also have assets such as property, their age can be a risk factor for credit institutions. This is mainly due to the fact that the risk of the borrower dying during the term of the loan or no longer being able to repay the loan increases with age.
Some credit institutions therefore set a maximum age of 70 for granting loans or offer special loans for older people. These loans can be adapted to the applicant’s pension situation, for example, so that the monthly installments are lower and the repayment period is extended accordingly. Property as collateral is also often considered for older borrowers, which can lead to more favorable conditions.
Another aspect that is relevant for older people is securing the loan with residual debt insurance or similar products. These insurance policies ensure that the loan is covered in the event of unforeseen events such as serious illness or death, so that no financial burden is transferred to the heirs.
Miro Kredit AG supports both older and young borrowers in finding the right loan solutions for them. Our comparison service helps you to analyze the various offers and identify the best conditions for your individual situation. In this way, you can ensure that you remain financially flexible and can realize your goals regardless of your age.
Further conditions for borrowing
In addition to the factors already mentioned, such as age, income, and creditworthiness, there are other conditions that play an important role when taking out a loan in Switzerland. These conditions vary depending on the credit institution and type of loan, but some basic requirements are generally similar for all lenders.
One of the most important requirements is proof of a stable income. Most credit institutions require that the applicant has been continuously employed by the current employer for at least three months and has already passed the probationary period. In addition, the last three payslips must be presented. This serves as proof of certain financial stability and the ability to service the monthly loan installments on time.
Self-employed persons or freelancers generally have to provide more comprehensive proof of their income situation and the financial stability of their company.
Another important criterion is the credit check, in which the credit institution checks whether the applicant has reliably fulfilled credit obligations in the past. Negative entries, such as payment defaults or ongoing debt collection proceedings, can lead to the loan application being rejected or a loan only being granted under more difficult conditions.
Creditworthiness or credit rating
Creditworthiness, also known as credit rating, is a decisive factor in the granting of credit. It provides information on how likely it is that the borrower will be able to properly repay the loan taken out. Creditworthiness is determined by various factors, including income, length of employment, existing debts, and previous credit histories.
In der Schweiz erfolgt die Bonitätsprüfung durch spezialisierte Auskunfteien wie der ZEK, which provide the credit institution with information about the applicant’s financial situation. A positive credit score increases the chances of credit approval and can also lead to more favorable conditions, such as lower interest rates.
In order to improve their credit rating, borrowers should ensure that they settle existing liabilities on time and do not accumulate unnecessary debt. Regular income and a solid job also help to improve creditworthiness.
Residence and residence permit
Just like a good credit rating, a permanent residence in Switzerland is also a basic requirement for borrowing from most Swiss banks and credit institutions. This residence must be officially registered and the applicant must have Swiss citizenship or a valid residence permit. This regulation ensures that the borrower can be contacted if necessary and that there are no legal uncertainties regarding their status.
The type of residence permit can also play a role. Swiss citizens and people with a permanent residence permit (C permit) generally have no difficulty obtaining a loan. However, stricter conditions may apply to people with a temporary residence permit (B permit), as they generally offer a less secure long-term perspective. In such cases, credit institutions may require additional collateral or higher interest rates to cover the associated risk.
Credit for cross-border commuters
Cross-border commuters who work in Switzerland but live in a neighboring country such as Germany, France, or Italy can also take out loans from Swiss banks. However, special conditions apply here too. The bank will usually check the cross-border commuter’s employment contract and payslips to ensure that they have a stable income. Creditworthiness also plays an important role and here too it can be an advantage if the applicant already has a positive credit history in Switzerland.
A major difference for cross-border commuters is that they can often take out loans in the local currency of their place of residence, which makes repayment easier. However, this presupposes that the bank offers a corresponding option. Some banks also require cross-border commuters to open a Swiss bank account from which the monthly loan installments can be debited.
Credit with a residence permit
People with a residence permit (B permit) can also take out loans in Switzerland, but the conditions are often stricter than for Swiss citizens or holders of a permanent residence permit (C permit). A key point is the duration of the residence permit in relation to the term of the loan.
Credit institutions want to ensure that the loan repayment is completed within the period of validity of the residence permit in order to minimize the risk of non-payment.
Banks also often require additional collateral or higher interest rates if the borrower only has a temporary residence permit. In some cases, it may also be necessary to call in a guarantor to step in in the event of a payment default. As a rule, this guarantor must have a permanent residence permit or Swiss citizenship.
Miro Kredit AG helps you to find the best offers, regardless of whether you are a cross-border commuter, have a residence permit, or are a Swiss citizen looking to take out a loan. Our platform offers a comprehensive comparison so that you can quickly and easily identify the conditions that best suit your needs.
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Conclusion
Borrowing in Switzerland is subject to clear legal regulations and strict requirements. Age, creditworthiness, and place of residence all play a key role. In addition, the Consumer Credit Act protects consumers from over-indebtedness by stipulating a comprehensive creditworthiness check.
Whether you are young, older, or have a special residence status – it is important to inform yourself thoroughly about the conditions and requirements in order to find the best loan conditions and ensure financial stability. Miro Kredit AG supports you in finding the right offers for your individual situation.
If you are wondering “How does a property loan work”, we can also help you with this.
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)