For each loan application, your personal financial situation, with income and expenditure, is carefully checked to ensure the solvency of the loan. Banks have access to various databases with risk profiles. Only with a good credit rating and low risk will you get a low effective interest rate.
Overview of the Consumer Credit Act: important facts you should know
The Consumer Credit Act in Switzerland regulates various aspects of credit that are important for borrowers. Here are some key points that you should bear in mind:
- ZEK entry: Every loan application is recorded in the Central Credit Information Centre (ZEK). This central database enables lenders to check the credit history of applicants.Note: Negative ZEK codes make borrowing considerably more difficult.
- Credit rating and credit history: Multiple credit enquiries, regardless of the provider, can affect your credit rating and reduce your chances of being granted credit.
- Exclusion criteria: Loans are not possible in the case of debt enforcement proceedings, certificates of loss or seizures. Banks do not grant loans to repay outstanding debt enforcement proceedings.
- Blocking periods after repayments: Nach Rückzahlungen von Pfändungen und Verlustscheinen gilt eine Sperrfrist von 2 bis 5 Jahren für neue Kreditaufnahmen.
- Budget review and risk calculation: A budget check and risk calculation is mandatory for loan applications. Banks access various databases with risk profiles.
- Cancellation period and payment: Loans are only paid out after a cancellation period of 14 days. During this period, both you and the bank can withdraw from the loan agreement without any particular reason.
- Effective loan interest rate: With a good credit rating and low risk, you will receive a low effective loan interest rate.
Minimum requirements for a loan
To obtain a loan, you must fulfil certain criteria:
- Minimum age of 18 years
- a monthly net income of at least CHF 3,000
- a Swiss residence permit (C, G or B, at least 12 months in Switzerland)
- a permanent or temporary position (at least 6 months temporary)
- Self-employment with a company duration of at least 24 months and no debt enforcement proceedings, loss certificates or seizures.
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