Financial Situation and Creditworthiness

Your current financial situation

Your creditworthiness

The budget calculation determines your ability to repay the loan, taking into account your ongoing expenses, income, and financial commitments. It also establishes the maximum credit amount you are entitled to, which must not be exceeded.

Budget calculation – maximum authorized loan amount

The budget calculation is one of the key conditions for receiving a positive response from banks.
If the loan amount you request exceeds the maximum allowed by the budget calculation, your application will be denied, even if all other conditions are met. Therefore, it is essential that your application is submitted with an amount that falls within the “acceptable” range.

Additionally, since January 2016, a safety margin must be added to this ceiling to anticipate potential serious problems that could affect your health, professional, or personal life.

Budget calculation or creditworthiness assessment

According to Article 28 of the Consumer Credit Act (KKG), the budget calculation determines a ceiling for your loan application in Switzerland that must not be exceeded. This calculation considers your expenses (rent, taxes, number of children, etc.), your income, and existing loans (private loans, leases, Visa/Mastercard, etc.).

This calculation is always based on a 36-month period, regardless of the loan duration you choose.

Impact of marital and family status on budget

Banks apply different approaches depending on whether you are married, in a civil partnership, or cohabiting, which can influence the budget calculation and the loan approval decision.

Do you have children?

Since 2015, it has been mandatory to declare childcare costs for children under six years old.

Some banks may waive these childcare costs if you sign a waiver stating that your children do not attend daycare.

CC Crédits Conseils SA analyzes each situation on a case-by-case basis, identifies strengths and weaknesses, provides personalized advice on the best strategy to avoid pitfalls and leverage your profile’s advantages, and finally guides you objectively to the bank that will respond positively to your profile under the best conditions.

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)