The advent of digitalization simplifies access to personal loan in Switzerland. Several lending organizations operate on the local market, and when you look at the offers, you sometimes find yourself in a dilemma.
In this article we highlight 7 tips for successful financing. Let's start already by mentioning that Swiss consumers benefit from protection established by law. We operate within one of the most stringent and regulated frameworks in Europe (and indeed in the world).
Summary
We invite you to share with you some specific features of private credit and to give you some advice for successful financing. Are you ready? ;)
Looking for offers online is the first step in finding THE personal loan that suits your needs. You will certainly have to go further than a simple Google search (or ChatGPT and Bing Chat).
Talk to industry experts. Receiving the right advice at the right time costs you absolutely nothing. A credit broker or financial advisor will help you understand the various credit options available. You can then make an informed decision about your financing.
Good to know!
Financial advice does not commit you to anything.
The Consumer Credit Act (LCC) requires the establishment of a budget to calculate its borrowing capacity. This is an important step that requires a thorough review of all income and expenses with your financial advisor.
A hastily made budget risks leading to a refusal, calling into question your financing or weakening your finances. On the contrary, a realistic budget will allow you to properly structure the management of your personal finances and ensure the relevance of your financing.
A well-organized budget allows you to:
- Choosing an adequate financing envelope
- Strengthen your solvency
- Control your monthly bills
- Improve your ability to repay
Plan for a sufficient funding envelope. This will allow you to overcome unforeseen events and ancillary costs. According to the federal consumer credit law, a private loan can be repaid in advance at any time. It is a benefit that consumers have and to which you are entitled.
Borrowing too little risks weakening the balance of your finances in case of unexpected expenses. You may then be forced to request new financing after a few months already, with no guarantee of acceptance by banks.
As you probably know, the ZEK file plays an important role in the loan request. When you go through a broker to make a new application (or a loan buyback), the broker can order an extract from the ZEK. You will receive this document in the mail, and you can then analyze it with your broker.
Good to know!
You can easily order your ZEK extract.
The Consumer Credit Act1 (LCC) in Switzerland protects borrowers. The LCC was designed to combat over-indebtedness and has existed for 20 years. It is a law that also covers leases and credit cards. Today, 98% of loans in Switzerland are repaid thanks to this law.
Good to know!
Any global loan exceeding CHF 80,000 allows you to receive the funds immediately and avoid the 14 days of the legal withdrawal period
Evaluating a credit based solely on the interest rate is a mistake. Certainly, the interest rate is an indicator that allows you to compare loans. However, it can also be the tree that hides the forest.
Take into account that the interest rate is gross. Interest is tax deductible. This means that a rate that seems higher is also more fiscally advantageous.
In addition, to influence the total cost of your credit, the duration of the financing has as much impact as the interest rate. You can very well have a loan with a high interest rate and end up Repay your loan early as allowed by law for private loans. This maneuver reduces the total cost of credit.
The choice of a financing solution must in particular take into account the level of flexibility offered by your financing provider, the quality of advice and the level of service offered.
Any lending institution is obliged to report to the ZEK any credit application that he processes. If a borrower makes 5 credit applications to 5 different banks, there will be 5 credit applications opened in his name at ZEK.
The problem with this situation is that a refusal from the first bank can create a snowball effect. You can quickly end up with 5 cumulative rejections. This can ruin your creditworthiness and your reputation as a borrower.
A credit broker makes it easier for you to access financing
Avoid making predictions about your persona loan, use a broker. The latter will know which bank to refer you to. The first step in planning your personal loan is to determine a monthly payment that seems comfortable and adapted to your budget. You will be able to make an online request and discuss possible options with your broker following the bank's response. You are not committed to anything and benefit from the expert advice of a financing professional.
