Credit in Switzerland: Personal loans in detail
A personal loan provides customers with a method of financing planned as well as unscheduled expenditure. Swiss Credit are also used to bridge temporary financial difficulties. The entailed costs are determined by the bank and characterised by monthly instalments or monthly payments. However, there are also loans with more flexible repayment conditions. The costs of the interest on the loan can be considerable and can be as high as 12 %. It is therefore advisable to compare loans using our credit calculator and to consult a certified credit specialist.
Swiss credit - creditworthiness checks
If consumers wish to take out a loan in Switzerland, their creditworthiness is checked first. On the one hand, the creditworthiness assessment provides the bank with some security, but also protects the consumer from over-indebtedness. The assessment not only checks the creditworthiness but also the credit rating. For this purpose, information on income and general financial circumstances as well as information on financial obligations are evaluated.
In Switzerland, consumers are protected by the Federal Law for consumer credit. These contractual guidelines prevent borrowers from becoming financially overburdened and overindebted through a credit agreement. To this end, the Central Office for Credit Information (ZEK for short) checks information on the financial circumstances of potential borrowers. If, for example, the customer's bank cards are frequently blocked or payment deadlines are not met, the bank decision could be negative. Providing the information on income, tax and the minimum subsistence level dictated by the canton turn out positive, solvent borrowers are granted the loan.
Since 1 January 2016, there are no longer immediate loans in Switzerland (exception: up to 3 months term and/or from a loan amount of CHF 80000). Any borrower may withdraw from the contract without giving reasons within 14 days of signing the credit application (KKG 16 para. 1).
The legal situation - Credit Switzerland
From a legal point of view, a Swiss personal loan is a bilateral contractual relationship; the loan agreement is between the borrower (consumer) and the lender (bank).
The borrower's motive is to procure financial resources to finance certain acquisitions or projects or for permanent refinancing as an operating loan. The lender's motive is to earn interest by granting the loan.
The borrower thus has the aim of realising a certain project, which is not possible with just his own financial resources. The lender's aim is to lend money against interest and the security of repayment.
Loans in Switzerland:Some interesting statistics deal with loans in Switzerland. For example, the Association for the Management of a Central Office for Credit Information (ZEK) and the Swiss National Bank (SNB) present statistical figures on the granting of personal loans. In doing so, ZEK records the consumer credits of ZEK members in the area of cash, instalment, fixed and current account credits. Since 2005, the SNB has been dealing with consumer credit in accordance with Article 1 of the Federal Consumer Credit Act, or KKG for short. The statistics are representative and reflect the traditional credit business with the largest share of consumer loans.
In 2021, the volume of consumer credit contracts was CHF 3.91 billion. The number of current consumer credit contracts increased by about 0.7 per cent compared to the previous year to approximately 114,085 credit contracts (in the previous year there were approximately 113,281contracts).
In 2021, 27.6 percent of all credit rating queries were rejected, compared to 30.8 percent in the previous year.
In 2020, the volume of consumer credit contracts was 3.91 billion Swiss francs. The number of current consumer loans increased by about 0.7 per cent to about 114.085 loan contracts compared to the previous year (about 113.281 contracts in the previous year).
In 2020, 30.8 percent of all creditworthiness enquiries were rejected, compared to 32.5 percent in the previous year.
Year 2019: In 2019, the volume of consumer credit contracts was CHF 4.45 billion. The number of current consumer credit contracts decreased by about 2.4 per cent compared to the previous year to approximately 136,589 credit contracts (in the previous year there were approximately 139,999 contracts).
In 2019, 32.5 percent of all credit rating queries were rejected, compared to 29.7 percent in the previous year.
Year 2018: In 2018, the volume of consumer credit contracts was CHF 4.44 billion. The number of current consumer credit contracts increased by about 0.2 percent compared to the previous year to approximately 139,666 credit contracts (previous year: approximately 139,366 contracts).
In 2018, 29.7 percent of all credit rating requests were rejected, compared to 28.5 percent in the previous year.
Year 2017: In 2017, the volume of consumer credit contracts was CHF 4.199 billion. The number of current consumer credit contracts increased by about 2.4 per cent compared to the previous year to approximately 139,666 credit contracts (previous year approximately 136,555 contracts).
In 2017, 28.5 percent of all credit rating queries were rejected, compared to 30.1 percent in the previous year.