Consumer loan in Switzerland: terms and conditions

To obtain a personal loan in Switzerland, you must meet the legal requirements of the Consumer Credit Act (KKG), particularly regarding solvency and financial stability. Each bank also evaluates specific criteria such as your age, professional status, income, and type of residence permit to ensure the feasibility of your project.

1. Age Limits for a Loan

Loan requirements in Switzerland vary depending on age.

• Declined Age Groups

Individuals under 18 years and over 70 years are automatically declined.

• Accepted Age Groups Based on Professional Situation

If employed or an IV pensioner:

Loans are available for individuals aged 18 to 65 and must be fully repaid before the 65th birthday.

If retired:
The loan must be fully repaid before the 70th birthday, and a minimum income of CHF 3,000 net per month is required.

• Protection of Young Adults

Since January 2016, to protect young adults from over-indebtedness, advertising must not target individuals under 25 years of age, whether online, on billboards, or in gaming halls.

Loan approval requirements for those under 25 are significantly stricter. Age is evaluated as a trust indicator: the younger you are, the lower your age-related scoring, which makes access to personal loans more challenging.

2. Debt enforcement and loss certificates

If you currently have debt enforcement actions or loss certificates, it is impossible to obtain bank approval for your application, even if your creditworthiness is deemed good.

If you had debt enforcement actions in the past, your chances remain affected. However, obtaining a loan is not automatically excluded. In cases of severe financial incidents such as seizures or bankruptcies, your chances are significantly reduced or close to zero.

3. Professional situation

Your professional situation, whether you are actively employed or not, is one of the criteria defining your eligibility for a personal loan.

Two Main Reasons:

1. Legal requirements: The law stipulates specific conditions for your creditworthiness to be considered sufficient. Only the attachable portion of your income can be considered in the budget calculation.
2. Lenders' assurance: Lenders want to ensure that you can repay the loan. This includes both the amount of your income and its stability over time. A permanent contract with stable working hours is considered advantageous.

Excluded employment situations

The following cases exclude you from applying for a personal loan:

• Apprentice
• Student
• Unemployed
• Social assistance recipient

Accepted (or conditionally accepted) employment situations:

A loan in Switzerland is possible with the following employment relationships, whereby credit institutions apply different conditions:

• Accepted: Salaried employee or employee with a permanent employment contract.
• Conditionally accepted: Temporary employment relationships, employees in your own company, self-employed persons, pensioners (IV or AHV pensioners).

Personal loan for self-employed individuals and managing directors:

If you're selfemplyed and would like to apply for a loan as a self-employed person or managing director of a GmbH or AG, the following conditions apply:

• Residence in Switzerland
• At least three years of professional activity

Managing director without capital shares or with shares in an Ltd.

If you hold a management position in a company but have no capital shares, or if you hold capital shares in an AG, the same lending conditions apply to you as for regular employees.

4. Residence Permit

Nationality and place of residence are prerequisites for obtaining a personal loan. Individuals with Swiss citizenship, permit B, cross-border commuter permit G, and legitimation cards D, E, F can apply for a personal loan.

However, this does not apply to foreign nationals with an F, N, or S permit or residence authorization.

Swiss Nationality

In the following cases, you are excluded from applying for or obtaining a personal loan:

• To access credit, individuals with Swiss nationality must have their legal residence registered in Switzerland.
• Individuals residing in Liechtenstein are administratively considered Swiss.
• Swiss nationals whose primary residence is abroad are subject to the same regulations as cross-border commuters with a G permit.

C Permit

Individuals with a C permit are subject to the same personal loan regulations as Swiss nationals residing in Switzerland.

B Permit

The most important requirement for applying for a personal loan in Switzerland with a B permit is the issue date of the permit.

Duration of the permit

If your permit was issued more than 12 months ago, you can apply. If it was issued less than 12 months ago, your application will be denied.

Please note that additional restrictions may apply to B permit holders. Depending on the credit institution, the required minimum duration since the permit was issued may be longer, or other factors, such as marital status, may be considered.

We are happy to advise you on whether and at which credit institution your chances of obtaining a loan with a B permit are favorable.

G Permit – “Cross-border commuter loan”

The conditions for granting a personal loan in Switzerland to cross-border commuters depend on the duration of the employment contract and place of residence.

Previously, it was clearly defined which regions in neighboring European countries you had to reside in to be recognized as a cross-border commuter when working in Switzerland. This regulation has now been generalized: The only condition today is that you must live in an EU or EFTA country.

The main requirements for applying for a cross-border commuter loan are:

Duration of Employment Contract
To qualify for a loan as a cross-border commuter, the first requirement is the minimum duration of your employment contract with the same employer in Switzerland. This varies depending on the canton:

• If you work in the canton of Geneva
  Your employment contract must have been in place for at least 12 months with the same employer.
• If you work in another canton in Switzerland
  The duration of the employment contract(s) must be at least 36 months at the time of application.

Here you can find more information about loans with a G permit:

Legitimation Cards D, E, F

Are you a holder of a legitimation card of type D, E, or F and an international civil servant?

If you are an employee of an international organization in Switzerland or a permanent mission in Geneva, the first requirement for obtaining a personal loan is that your primary residence is in Switzerland.

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)