Consumer Credit in Switzerland
A Consumer Credit – Rules, Reasons, and Benefits.
A Consumer Credit – Rules, Reasons, and Benefits.
Since consumer credit is essentially the same as a private loan – with a few additional regulations – the application process is identical to applying for a private loan.
With our help, you can apply for consumer credit easily and for free through our fully digitalized process.
Learn more: Authentication and signing of your personal loan – 100% online, free, and risk-free.
To learn more about the criteria for obtaining a loan in Switzerland, it’s important to understand that lenders consider factors such as age, employment status, and residency. Find out in detail how these rules influence your chances of obtaining a loan by visiting the linked page.
Calculation example
Loan of CHF 20'000. An effective annual interest rate between 4.9% and 10.95% and a term of 48 months generate total interest between CHF 2'018.10 and CHF 4'549.60. Term: 6-120 months; Maximum annual interest rate (including all credit charges) 10.95%. The granting of a loan is prohibited if it leads to the over-indebtedness of the consumer.(Art. 3 LCD)
Consumer credit is a loan that meets the criteria of the CCA (Swiss Consumer Credit Act). When a loan is granted to an individual, with an amount of up to CHF 80,000 and a repayment period of more than three months, it is classified as consumer credit.
The CCA imposes specific rules for consumer credit. For instance, before a loan is approved, a precise budget calculation must be conducted. This calculation ensures the loan is suitable for your financial situation. In other words, it confirms that you can comfortably repay the loan.
Why such caution?
The primary goal of the CCA is to protect you from over-indebtedness. This law ensures that every loan is thoughtfully designed, appropriate, and manageable for you.
A significant benefit for borrowers is the right of revocation. After signing a consumer credit contract, you have 14 days to change your mind. This revocation is free of charge and penalty – you can cancel your loan with ease. However, it is important not to misuse this option, as such information will be visible in your credit profile for lenders.
One downside of this revocation period is that the loan amount will only be disbursed after the 14 days have expired.
Another advantage is that the CCA allows you to repay your loan, in full or in part, at any time without penalty. While adhering to monthly installments is important to maintain your creditworthiness, you are free to make additional payments or settle your loan early if your financial situation allows. By shortening the loan term, you also reduce the total interest costs!
To support the objectives of the CCA, Swiss legislators established the IKO (Information Office for Consumer Credit). This database compiles information on consumer credit and helps lenders obtain a comprehensive view of your current situation so that existing obligations can be considered when calculating your repayment capacity.
The CCA also specifies that the maximum loan amount should not exceed what you could repay within 36 months using the attachable portion of your income, even though repayment terms in Switzerland can extend up to 10 years.
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Request
Request your loan by using the online form or by calling us.
Complete your information and send your documents
Submit the mandatory documents and relevant information we need to assess your loan request.
Assessment and offer
Final response in less than 24 hours after receipt of the needed information, mandatory documents and a complete review of your solvency.
Contract signing and disbursement of your loan
Swift disbursement after you sign the loan contract and the consequent 14 day right of revocation (cooling-off-period).In addition to the IKO, Switzerland has the ZEK (Central Office for Credit Information), a database that meets the information requirements of lenders. The ZEK goes beyond the IKO by providing additional data, such as loans not covered by the CCA, your credit history, reasons for a bank rejecting a loan, and even credit revocations within a six-month period.
