Credit Switzerland
Taking out a loan is a good option if you are planning a larger investment but cannot raise as much money as you need all at once. To be able to take out a loan in Switzerland, however, certain requirements must be met, which we will look at in this guide.
A loan comparison is essential to find the best loan options. With an independent online loan comparison, you can transparently compare different loan offers in terms of interest rates and loan instalments and thus make an informed decision based on your financial needs.
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What is a loan and how does it work?
A loan is a loan granted by a bank or other financial institution to a borrower. The borrower receives a certain amount of money which they must repay within an agreed period. Loans can be used for various purposes, such as buying a car, a home or other consumer goods.
The loan agreement regulates the conditions of the loan, including the interest rate, the term and the repayment conditions. The borrower must repay the loan within the agreed period in order to pay the interest and amortisation of the loan. It is important that the borrower fully understands the terms of the agreement to avoid financial difficulties.
What are the requirements for a loan in Switzerland?
In order to obtain a loan in Switzerland, you must meet various minimum requirements. These include, for example, that you have already reached the age of majority. If these and other requirements are met, the bank will check your financial situation and your previous payment history. After signing the loan agreement, you will have to wait for the money to be paid out, which indicates that the statutory waiting period has expired.
How does the credit check work?
The credit assessment checks a person’s creditworthiness or ability. This involves various factors, such as previous credit history, income and other financial aspects. The purpose is to find out how likely the person is to default on a loan. So you cannot avoid such a check when you apply for a loan in Switzerland. You will also need to provide your e-mail address in order to receive information and updates on the credit process.
Why is a credit check important for a loan in Switzerland?
Whenever a loan is applied for in Switzerland, a credit check is carried out by a lender. The financial institution uses this to find out whether or not it can grant the person in question a loan. However, this is also intended to ensure that the loan applicants themselves do not fall into a debt trap.
The Swiss Consumer Credit Act stipulates that credit checks must be carried out. If there are negative entries about you in the Central Office for Credit Information (ZEK), the credit institution may not grant the credit.
On the other hand, granting a loan without a prior credit check is prohibited. If you are offered such an opportunity, you should by no means accept it, because it is most likely a scam.
Last but not least, checking your creditworthiness also benefits you, as you only receive sums that you can really afford. Fraudsters do not adhere to the legal requirements, so they do not pay attention to your protection either.
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How much should I earn to service a loan?
How much you need to earn each month to pay off a loan depends on the amount you need. Consequently, a formula for calculating the maximum amount of credit you are allowed looks like this:
- Income - expenditure = tax-free amount per month (applies to each household)
- Maximum amount of the loan = allowance per month x 36
An example of this:
- Budget: CHF 8,000 (income/earnings) - CHF 7,000 (expenses)
- Available margin per month = CHF 1,000
- CHF 1,000 x 36 months = CHF 36,000
The final result is the maximum amount of the loan with interest. To assess the creditworthiness, credit providers must assume 36 months, even if a longer term has been agreed. This means that with an allowance of CHF 1,000, you can take out a loan of CHF 36,000 (total debt).
Can foreigners also get a loan in Switzerland?
Living in Switzerland is considered comparatively expensive, which is why it can be particularly difficult for foreigners to gain a foothold financially. In this case, a personal loan with a low credit rate can help. According to the Federal Statistical Office, people who move to Switzerland from abroad take out a consumer loan more often than Swiss nationals.
If you are not yet a naturalised citizen, however, you must meet a few requirements for taking out a loan, which depend on your residence permit, among other things. The length of time you have lived in Switzerland also plays a role. But it also depends on the respective credit institution.
Do you have any questions or need advice?
Please feel free to contact us
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Types of loans
There are different types of loans, which can be differentiated according to their purpose and conditions.
Some of the most common types of loans are
- 01
Consumer credit
A loan used for the purchase of consumer goods such as cars, electronics or furniture.
- 02
Property loan
A loan that is used to purchase or finance a home or property.
- 03
Personal loan
A loan that is used for personal purposes such as the purchase of consumer goods or the financing of travel.
Each of these types of credit has its own specific conditions and benefits
that need to be considered before taking out a loan.
Credit agreement and conditions
The loan agreement is a contract between the borrower and the lender that regulates the terms and conditions of the loan. The contract contains important information such as the interest rate, the term, the repayment terms and the conditions for granting the loan.
It is important that the borrower reads and understands the loan agreement carefully before signing it. The borrower should ensure that they can fulfil the terms of the loan in order to pay the interest and repay the loan. Lending is prohibited if it leads to over-indebtedness (Art. 3 UCA). The lender must ensure that the borrower has the creditworthiness to repay the loan.
Another important aspect is the option to repay the loan early without incurring penalty interest. This gives the borrower flexibility and can help to save on interest costs. The credit decision becomes effective within 14 days of signing the credit agreement and the borrower should ensure that they can fulfil the credit conditions.
It is also advisable to look into the possibility of changing the loan to a more favourable provider if the terms of the loan are no longer advantageous. The borrower should always keep an eye on the loan conditions to ensure financial stability.
Favourable credit comparison in Switzerland
To benefit from a loan at the most favourable conditions, you should not accept the first offer that comes along. Instead, you can always get support from Miro Kredit AG from Basel. No matter whether you need the loan for furniture, a renovation, further education, the purchase of a car or other nice things in life: We will help you find a suitable one for yourself.
We attach great importance to ensuring that the offer is fully orientated towards your needs. To benefit from our expertise in this area, all you have to do is fill out a credit application with all the relevant data, which we make available to you on our website. Within 2-3 working days you will be informed of the decision regarding your favourable credit application.
Submit your loan application nowHow do I recognise the seriousness of an offer?
If you entrust us with the search for a favourable credit offer for you, you can assume that the offers are always reputable. However, if you would like to obtain your own loan offer, you should be able to check the reliability of the provider yourself.
Characteristics of reliable credit brokers:
- Transparency for all information
- No hidden costs
- The connections between the loan amount, interest rates and term are made clear
- Sufficient income, legal age and creditworthiness are checked and required
- Certificates and awards available
- Positive press reviews and customer reviews
- Quick and easy access to the credit institution’s employees without any expenses
Is a personal loan for private individuals better than leasing?
There is a crucial difference between leasing a product (such as a car) and taking out a personal loan: a leased car does not belong to you. Instead, you borrow it for a certain rent (lease payment) and duration in order to use it during that time.
Instead, take out a car loan, borrow money for the car from a credit institution. With this, you buy it from the car dealer or a private person and subsequently it is yours. You owe the credit institution the amount borrowed, including interest, which has to be repaid in a pre-determined period of time.
The advantages of a personal loan:
If you finance a product with a personal loan, ownership is transferred directly to the buyer. As the buyer, you have all the rights concerning the purchased product, so you can also sell it again at any time. For example, if you have financed a car with a loan, you can sell the vehicle at any time and simply repay the loan. It is different with leasing, because it is not so easy for consumers to be released from the contract.
Apply for credit easily online
As already mentioned, you can easily apply for a loan with us online. To do so, you will be guided step by step through a form and have to fill it out with your details. What is requested:
- Information on the loan: desired sum, contract term in months and whether or not instalment protection is to be provided
- Personal details
- Information about your professional situation
- Additional information
What is an instant loan?
Offers of instant loans, also known as “express loans” or “fast-track loans”, are sometimes circulating in Switzerland. However, you should not accept these.
They are lured with a supposedly quick payment of the money, although the so-called instant loan does not exist in Switzerland. Such lures often lead to dubious companies that are not licensed credit providers. These should be distinguished from reputable credit providers who also advertise instant loans but do not offer them at all.
Often they promise to grant the desired loan immediately, but then prefer dossiers or process them more quickly. However, this is not unusual, because all professional providers are able to do this.
According to the self-regulatory agreement of the credit industry, advertising for instant loans has been prohibited in Switzerland since January 2016. This is a form of misleading advertising that falsely suggests that a consumer loan is granted particularly quickly and without a prior creditworthiness check.
FAQ
If you want to take out a loan in Switzerland, you should first familiarise yourself with the available options. In this section, we have compiled and answered the most frequently asked questions on the subject.
Conclusion
Taking out a loan in Switzerland can make sense in many cases. If you would like to make a larger purchase but do not have the necessary budget, a personal loan is preferable to leasing. However, you should bear in mind that you have to meet certain requirements in order to be granted a loan by a Swiss credit institution.
For example, it is a legal requirement that information about your creditworthiness must be provided. This serves not only to protect the credit institution, but also to protect you from falling into debt. You will only be granted a loan if you are able to repay the fixed loan instalments.
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)