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Personal loans glossary at comparis.ch

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What is regulated in the general terms and conditions for loans?

The general terms and conditions are the standard conditions used by a company to regulate its contractual relationships. When a <a href="/privatkredit/info/glossar/privatkreditvertrag">loan agreement</a> is signed or an account opened, a business agreement is established between the bank and the customer. The general terms and conditions, along with the safe custody regulations, form part of the basic documentation to which the customer agrees when the agreement is concluded.
The general terms and conditions are the same for all the <a href="/privatkredit/info/glossar/kreditnehmer">borrowers</a> of a bank and regulate the relationship between the bank and the customer. They do, however, vary between the different <a href="/privatkredit/info/glossar/kreditgeber">lenders</a>. Information on fees and additional charges are usually included in the general terms and conditions or the appendix.

General terms and conditions for loans

allgemeine-geschaeftsbedingungen-agb

There is a 14-day cooling-off period within which a borrower may withdraw from a loan agreement. For this reason, a loan is only paid out on the 15th day. This is regulated by the <a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act (KKG)</a>.
Lenders define the start of the <a href="/privatkredit/info/glossar/widerrufsrecht">right of withdrawal</a> period differently.
In most cases, the money is transferred to a bank account. <a target="_blank" rel="noopener noreferrer" href="/privatkredit/kreditrechner/cembra">Cembra</a> is currently the only lender offering the option of having the loan paid out in cash at the counter. In a contract, this is described as a cash loan. However, the KKG also describes <a href="/privatkredit/info/glossar/privatkredit">personal loans</a> that are transferred to a bank account as cash loans.

Disbursement of a personal loan | Glossary | comparis.ch

auszahlung-privatkredit

What is your credit standing, how is it assessed and why is a credit check carried out?

A person's credit standing is assessed using a combination of their credit capacity as defined by the <a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act (KKG)</a> and their creditworthiness.
<a href="/privatkredit/info/glossar/kreditfaehigkeit">Credit capacity</a> is checked to prevent the borrower from falling into excessive debt. The law states that a borrower must be of age and able to pay off the loan including interest within 36 months using their disposable (attachable/seizable) income. All lenders are obliged to calculate this. They must also take into account the borrower's ongoing obligations, such as other loans and leases.
Lenders check <a href="/privatkredit/info/glossar/kreditwuerdigkeit">creditworthiness</a> to assess the risk of the borrower defaulting on their loan, and usually also to determine what interest rate to offer. To make the assessment, lenders use sources such as credit databases, debt collection offices, the <a href="/privatkredit/info/glossar/zentralstelle-kreditinformationen-zek">ZEK</a>, the <a href="/privatkredit/info/glossar/informationsstelle-konsumkredit-iko">IKO</a> and documentation provided by the borrowers themselves. They also draw on their own customer data and general statistical information in their risk assessment.
Each bank evaluates this data on an individual basis. Borrowers cannot usually predict with any certainty their chances of having a loan application approved. Approximately 50% of all loan applications are rejected. Each rejection is stored at the ZEK and can have a negative effect on the success of subsequent loan applications.
Additional information: If you submit an enquiry via the Comparis website, you can reduce the risk of a rejection. Your enquiry will be placed with a bank that matches your profile. <a rel="noopener noreferrer" href="/privatkredit/default">Submit no-obligation enquiry</a>
You can find out more about&nbsp;<a rel="noopener noreferrer" href="/privatkredit/kreditratgeber/bonitaetspruefung">credit checks</a> here.
Request your <a rel="noopener noreferrer" href="/bonitaetsauskunft/default">credit score</a> free of charge via Comparis (in cooperation with CRIF AG) or use our template to request the <a rel="noopener noreferrer" href="/bonitaetsauskunft/selbstauskunft">personal information</a> stored about you by the four largest credit agencies.

Credit standing: evaluation for loan approval | comparis.ch

bonitaet

Crowdlending: definition and comparison with personal loans

Crowdlending is a practice of lending that takes place between two parties directly, without the involvement of a bank.&nbsp;
There are three different types:
<ul>
 <li>Lending to private individuals (P2P or B2P)</li>
 <li>Lending to businesses (P2B or B2B)</li>
 <li>Lending/investment to finance property</li>
</ul>
In the case of property financing, the parties on both sides can be private individuals or businesses.
Crowdlending platforms give lenders and <a href="/privatkredit/info/glossar/kreditnehmer">borrowers</a> the opportunity to request financing or invest in projects. The number of platforms and the proportion of professional investors involved has been rising continuously in recent years.
As with conventional loans, profit is generated by the application of interest on the money loaned or invested. The platforms themselves are financed by fees.
The most well-known process in crowdlending is the auction process, in which multiple lenders invest an amount chosen by themselves to cover a portion of the requested loan.
As of 1 April 2019, crowdlending platforms are also subject to the <a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act (KKG)</a>.

Crowdlending: P2P lending explained in simple terms | comparis.ch

crowdlending

What does the effective annual interest rate say about a loan and why are there different interest rates?

This describes the cost of capital provided by&nbsp;<a href="/privatkredit/info/glossar/kreditgeber">lenders</a>. The effective annual interest rate must be stated in the <a href="/privatkredit/info/glossar/privatkreditvertrag">consumer credit agreement</a>. It expresses the&nbsp;<a href="/privatkredit/info/glossar/kreditkosten">loan costs</a>&nbsp;for the&nbsp;<a href="/privatkredit/info/glossar/privatkredit">personal loan</a>&nbsp;in terms of an annual percentage, which must include all the loan costs. If this is not possible, these costs must be listed separately.
The interest rates vary from one lender to another. 
Some lenders have fixed interest rates, while others contractually agree to an interest rate between a minimum and maximum of the offered range.
The assessment of <a href="/privatkredit/info/glossar/kreditwuerdigkeit">creditworthiness</a> is the most important factor for determining the bank and the interest rate for the loan.
You will find an overview of the <a href="/privatkredit/info/glossar/kreditkosten">loan costs</a> for various interest rates in the Comparis <a rel="noopener noreferrer" href="/privatkredit/kreditrechner">loan calculator</a>.

A quick and easy explanation of the effective annual interest rate – comparis.ch

effektiver-jahreszins

How expensive can a loan be and who defines the maximum interest rate?

The maximum interest rate is the legally defined maximum rate of interest that lenders are allowed to charge for providing a loan.
It is defined by the Federal Council in the <a target="_blank" rel="noopener noreferrer" href="https://www.admin.ch/opc/de/classified-compilation/20022329/index.html">Ordinance to the Consumer Credit Act</a>&nbsp;(in German, French and Italian only) and reviewed each year on the basis of the Libor. This ensures that the refinancing costs of the lenders are taken into account. At the moment, the maximum interest rate for <a href="/privatkredit/info/glossar/konsumkredit">consumer loans</a> is 10%.
For credit cards on the other hand, the maximum interest rate is currently 12%.

Maximum interest rate on loans | Facts & figures | comparis.ch

hoechstzinssatz

What is the Information Centre for Consumer Credit (IKO) and what data is stored there?

The work of the Information Centre for Consumer Credit (IKO) is based on the <a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act</a>. The IKO is a federal body that falls under the supervision of the Federal Department of Justice and Police FDJP.
According to the Ordinance to the Consumer Credit Act, lenders must report the following information to the IKO for every approved consumer loan and lease:
<ul>
 <li>Last name, first name, address, and date of birth of borrower</li>
 <li>Type of credit</li>
 <li>Agreement start date</li>
 <li>Number of instalments</li>
 <li>Gross loan amount including contractually agreed interest rates and costs</li>
 <li>Agreement end date (if contractually agreed)</li>
 <li>Amount of repayment instalments (if contractually agreed)</li>
 <li>Any payment delays</li>
</ul>
The following must also be reported to the IKO:
<ul>
 <li>Credit and store cards, including credit limit</li>
 <li>Overdraft limits on current accounts</li>
 <li>Outstanding payments that amount to at least 10% of the loan amount, or three monthly instalments in the case of a lease</li>
 <li>Overdraft limits, if an outstanding balance of over 3,000 francs is accumulated over a three-month period</li>
</ul>
For the <a href="/privatkredit/info/glossar/kreditfaehigkeitspruefung">credit capacity check</a>, lenders must request information from the IKO regarding any obligations reported for the borrower in question.
Difference between IKO and <a href="/privatkredit/info/glossar/zentralstelle-kreditinformationen-zek">ZEK</a>: Unlike the ZEK, the IKO only records data pertaining to ongoing obligations that are subject to the Consumer Credit Act. The aim of the IKO is to prevent borrowers from falling into excessive debt.
The IKO is subject to data protection laws. Anyone is entitled to request <a target="_blank" rel="noopener noreferrer" href="https://www.iko-info.ch/de-ch/kredit-leasingnehmer/eintrage-zu-meiner-person">personal information</a>&nbsp;(link in German and French only) stored about themselves. To do this, you need to send an information request form, with a handwritten signature, together with a copy of an official ID (identity card, passport, driving licence) to the IKO. The IKO is then legally required to provide the information within 30 days.
More information on the IKO (in German and French only): <a target="_blank" rel="noopener noreferrer" href="https://www.iko-info.ch">www.iko-info.ch</a>

Information Centre for Consumer Credit (IKO) | comparis.ch

informationsstelle-konsumkredit-iko

What is a payday loan and how does it differ from a consumer loan, personal loan or cash loan?

A payday loan, or a cash advance, is a loan for a relatively small amount of money. It is usually used to bridge a short-term financial gap.
From a legal perspective, there is no difference between a payday loan, a cash loan and a <a href="/privatkredit/info/glossar/privatkredit">personal loan</a>. All these terms are often used to refer to a <a href="/privatkredit/info/glossar/konsumkredit">consumer loan</a> as defined by the <a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act (KKG)</a>.
The KKG lists the precise criteria used to define a consumer loan and the rules that must be observed when approving such a loan.
Although payday loans and cash advances are associated with small amounts of money and low risk, loan amounts of just a few thousand francs can still put considerable pressure on a borrower's budget, depending on their income.

Payday loan: definition and comparison | comparis.ch

kleinkredit

What is a consumer loan and how does it differ from a payday loan, personal loan or cash loan?

A consumer loan is a loan that fulfils the following criteria as defined by the <a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act </a>:
<ul>
 <li>The loan is used by a private individual (consumer) for private purposes only (not professional or commercial purposes).</li>
 <li>The loan amount is between 500 and 80,000 francs.</li>
 <li>The repayment term is longer than 3 months.</li>
 <li>The loan is not secured by collateral (e.g. directly or indirectly by a mortgage or by ordinary bank warranties such as assets).</li>
</ul>
The umbrella term for consumer loan is <a href="/privatkredit/info/glossar/privatkredit">personal loan</a>.

Consumer loan: definition and useful information

konsumkredit

What is regulated by the Consumer Credit Act (KKG) and to which loans does the Consumer Credit Act apply?

The Swiss Federal Act on Consumer Credit (KKG) that came into force on 1 January 2003 forms the basis of loan agreements that fulfil specific criteria and are classified as <a href="/privatkredit/info/glossar/konsumkredit">consumer loans</a>.
It also applies to:
<ul>
 <li>Leasing agreements for private purposes</li>
 <li>Credit cards, store cards and overdrafts, if the balance can be repaid in instalments</li>
</ul>
The Federal Council defines the <a href="/privatkredit/info/glossar/hoechstzinssatz">maximum interest rate</a> in each case in the <a target="_blank" rel="noopener noreferrer" href="https://www.admin.ch/opc/de/classified-compilation/20022329/index.html">Ordinance to the Consumer Credit Act (VVKG)</a> (in German, French and Italian only).

Swiss Consumer Credit Act: the legal basis for loans

konsumkreditgesetz

What is the maximum amount I can borrow and how is this loan amount calculated?

The loan amount, often also called the principal, refers to the monetary value lent as credit.
The maximum possible loan amount depends primarily on the financial circumstances of the borrower. Income, expenses and ongoing obligations such as leases are taken into account when calculating the budget.
In the case of <a href="/privatkredit/info/glossar/konsumkredit">consumer loans</a>, the law (<a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act [KKG]</a>) also requires that borrowers must have sufficient available income to be able to pay off the loan within 36 months (<a href="/privatkredit/info/glossar/kreditfaehigkeit">credit capacity</a>). The repayment term actually selected is irrelevant. You can find out your approximate credit limit using the <a rel="noopener noreferrer" href="/privatkredit/kreditlimite-berechnen">credit limit calculator</a>, which runs on official software also used by banks.
A <a href="/privatkredit/info/glossar/kreditfaehigkeitspruefung">credit capacity check</a> is not required for loans not subject to the Consumer Credit Act. However, in the case of higher loan amounts, a lender will of course calculate whether a borrower can actually afford the monthly instalments. Each lender wants to keep the risk of default as low as possible.
<a href="/privatkredit/info/glossar/kreditwuerdigkeit">Creditworthiness</a> is the second factor determining whether a loan will be approved for the desired amount.
The <a rel="noopener noreferrer" href="/privatkredit/kreditrechner">loan calculator</a> lets you quickly and easily work out the monthly loan instalments based on different repayment terms.

Loan amount: determining how much you can borrow | comparis.ch

kreditbetrag

What does credit capacity mean and why is credit capacity assessed?

Credit capacity refers to the ability of an adult borrower to repay a loan within 36 months using the attachable portion of their income. The actual loan term selected is not taken into consideration here.
The credit capacity check is required by law for loans that are subject to the <a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act</a> and is designed to protect against over-indebtedness.
The attachable or seizable part of the income is calculated by deducting the subsistence minimum (according to the guidelines of the canton of residence) from the borrower's net income.
The old age and survivors&rsquo; pension (AHV), invalidity insurance (IV) benefits and similar benefits are not attachable. This is why pensioners, for example, are not usually approved for loans.
Both credit capacity and <a href="/privatkredit/info/glossar/kreditwuerdigkeit">creditworthiness</a> are assessed within the scope of a <a href="/privatkredit/info/glossar/bonitaet">credit check.</a>

A simple explanation of credit capacity | comparis.ch

kreditfaehigkeit

What is a credit capacity check and what information is it based on?

The credit capacity check required by law for consumer loans is designed to prevent the borrower from becoming over-indebted.
The <a href="/privatkredit/info/glossar/kreditgeber">lender</a> must take account of at least the following outgoings when determining the budget:
<ul>
 <li>Rent/housing costs</li>
 <li>Taxes</li>
 <li>Obligations that have been reported to the <a href="/privatkredit/info/glossar/informationsstelle-konsumkredit-iko">Information Centre for Consumer Credit [IKO]</a> (existing loans, leases)</li>
</ul>
Additional information is also taken into account in a full <a href="/privatkredit/info/glossar/bonitaet">credit check</a>.
More information on <a href="/privatkredit/info/glossar/kreditfaehigkeit">credit capacity</a>.

Credit capacity check: what you need to know

kreditfaehigkeitspruefung

What is a lender and who is allowed to provide loans?

Lenders can be any private individuals or legal entities that provide <a href="/privatkredit/info/glossar/privatkredit">personal loans</a> on a commercial basis. They require a licence from the canton for this activity.

Lender: definition and facts

kreditgeber

How are loan costs broken down and how are they calculated?

Loan costs are the costs that <a href="/privatkredit/info/glossar/kreditnehmer">borrowers</a> incur by taking out a loan. Specifically, they are the interest costs incurred during the loan term and any fees.
For personal loans with flexible repayment arrangements, the loan costs cannot be calculated in advance. As no repayment term is agreed for these loans, the interest costs cannot be calculated.
The longer the repayment term, the more expensive the loan. However, it can also be risky to select a <a href="/privatkredit/info/glossar/laufzeit-kredit">repayment term</a> that is (too) short.
If the loan is paid off sooner than agreed, the loan costs are reduced.

Loan costs: calculation and fees

kreditkosten

What is a borrower? The definition of a borrower in the context of personal loans.

A borrower is someone who has concluded a <a href="/privatkredit/info/glossar/privatkreditvertrag">loan agreement</a>. In the case of <a href="/privatkredit/info/glossar/privatkredit">personal loans</a>, the borrower is a private individual who obtains a loan from a <a href="/privatkredit/info/glossar/kreditgeber">lender</a>.

Borrower: definition and explanation

kreditnehmer

What types of credit broker are there and what benefits do they offer?

Credit brokers are private individuals or legal entities that provide commercial brokerage services for personal loans. They require a licence from the canton to provide these services.
The law stipulates that brokers may only bill the lender, not the customer, for their services. They receive commission from the <a href="/privatkredit/info/glossar/kreditgeber">lenders</a>&nbsp;for their work. Legitimate credit brokers therefore never demand money from their customers.
Thanks to their knowledge of the market and their ability to assess a person's <a href="/privatkredit/info/glossar/bonitaet">credit standing</a> and select the most suitable lender, a good broker can significantly improve a person's chances of obtaining a loan compared to a direct enquiry.

Credit broker: definition and characteristics | comparis.ch

kreditvermittler

What is a creditworthiness check and what information is it based on?

Creditworthiness as assessed in a <a href="/privatkredit/info/glossar/bonitaet">credit check </a> considers the payment behaviour of a <a href="/privatkredit/info/glossar/kreditnehmer">borrower</a>. Lenders and other companies use it to assess whether borrowers are likely to pay their loan instalments (interest and principal) on time.
You can find more information under <a href="/privatkredit/info/glossar/bonitaet">credit standing.</a>

Creditworthiness – all you need to know about your credit standing

kreditwuerdigkeit

What is the repayment term and what do you need to consider when choosing it?

This is the agreed period within which a loan must be repaid. Lenders offer terms from 6 to 120 months. The longer the term, the more expensive the loan is.
Nevertheless, it is advisable to plan realistically and, in particular, budget for irregular and unexpected costs.
After all, you can pay off more than the agreed monthly instalment at any time by making extra payments. This enables you reduce your <a href="/privatkredit/info/glossar/kreditkosten">loan costs</a>.
Punctual payment of instalments is, of course, important from the perspective of the <a href="/privatkredit/info/glossar/kreditgeber">lender</a>. However, it is equally important for borrowers, so that they do not damage their <a href="/privatkredit/info/glossar/kreditwuerdigkeit">creditworthiness</a> and thereby their <a href="/privatkredit/info/glossar/bonitaet">credit standing</a>.

Repayment term: importance and information | comparis.ch

laufzeit-kredit

What costs are included in the monthly instalment of a loan and how are they calculated?

Calculating a loan means calculating the monthly instalment. This calculation is based on the loan amount, interest rate and <a href="/privatkredit/info/glossar/laufzeit-kredit">repayment term</a>. A monthly instalment therefore includes both the principal payments and the interest costs for repaying (amortization) the loan.
Loans are annuity loans with all instalments remaining the same over the repayment term.
Loan illustration:
Loan amount: CHF 10,000 
Effective annual interest rate: 7.9% 
Loan term: 24 months
Total interest costs: CHF 814.40 
Loan costs: CHF 10,000 + 814.40 = 10,814.40 
Monthly instalment: 10,814.40/24 months = CHF 450.60
As the loan is gradually repaid, the loan amount used for calculating the interest paid each month is reduced. Therefore, the loan becomes cheaper if you make repayments that are higher than the agreed amount.
Using the <a rel="noopener noreferrer" href="/privatkredit/kreditrechner">loan calculator</a>,&nbsp;you can quickly and easily find out roughly how high the <a href="/privatkredit/info/glossar/kreditkosten">loan costs</a> will be for the desired amount and the desired term.
The interest rate you are offered depends on your profile and your <a href="/privatkredit/info/glossar/bonitaet">credit standing</a>.

Monthly instalment for loans: information and calculation

monatsrate

How does a peer-to-peer loan differ from a standard personal loan?

Peer-to-peer loans are arranged directly between lenders and borrowers without involving a bank. They are the most common type of <a href="/privatkredit/info/glossar/crowdlending">crowdlending</a>.

Peer-to-peer loan

peer-to-peer-kredit

What is a personal loan and how does it differ from a consumer loan, payday loan or cash loan?

A personal loan is an interest-bearing loan not secured by collateral.
Personal loan amounts typically approved on the market range from 500 to 250,000 francs. In certain circumstances, some lenders will also offer loans of over 250,000 francs. Higher amounts are available on <a href="/privatkredit/info/glossar/crowdlending">crowdlending platforms</a>.
Personal loans of 500 to 80,000 francs with repayment terms of three months or more are considered <a href="/privatkredit/info/glossar/konsumkredit">consumer loans</a> and are subject to the provisions of the <a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act (KKG).</a>
Personal loans of over 80,000&nbsp;francs are not subject to the KKG&rsquo;s provisions that protect borrowers from getting into excessive debt, which means there is no compulsory <a href="/privatkredit/info/glossar/kreditfaehigkeitspruefung">credit capacity check</a> or legal <a href="/privatkredit/info/glossar/widerrufsrecht">cooling-off period</a> prior to <a href="/privatkredit/info/glossar/auszahlung-privatkredit">disbursement</a>.
Personal loans that do not fit the definition of the KKG or are between two private individuals are subject to the provisions of the debt enforcement and bankruptcy act (SchKG).

Personal loan: tips and information on loans

privatkredit

How and where can you apply for a personal loan and what documents are required?

For any loan application, borrower information must be transmitted to a <a href="/privatkredit/info/glossar/kreditgeber">lender</a>.
All lenders offer digital forms that <a href="/privatkredit/info/glossar/kreditnehmer">borrowers</a> can use to submit their personal data, required loan amount and the <a href="/privatkredit/info/glossar/laufzeit-kredit">repayment term</a>.
After the initial <a href="/privatkredit/info/glossar/kreditfaehigkeit">credit capacity</a> and <a href="/privatkredit/info/glossar/kreditwuerdigkeit">creditworthiness</a> checks on the customer, the lender will request further documents in support of the application.
These documents usually include:
<ul>
 <li>Recent salary statement(s)</li>
 <li>Certified copy of an ID card or passport</li>
 <li>For foreigners: residence permit or passport</li>
 <li>Tenancy agreement (in most cases)</li>
 <li>Documentation relating to the existing loan if refinancing or topping up</li>
</ul>
Other documents may be required depending on the borrower's situation (marital status, alimony etc.).
Some lenders require the original documents. Increasingly, lenders are offering customers the option of online identification. In this case, there is no need for a certified, paper copy of ID. With online loan applications, the documents and agreement itself can also be processed electronically.
For more information on the different lenders and their rates and conditions, click on the lender in our <a rel="noopener noreferrer" href="/privatkredit/kreditrechner ">loan calculator</a>.

Personal loan application: information on loan applications | comparis.ch

privatkreditantrag

Does a personal loan agreement need to be concluded in writing? What information must it contain?

A personal loan agreement must be concluded in writing. The <a href="/privatkredit/info/glossar/kreditnehmer">borrower</a> is entitled to a copy of the agreement. According to the <a href="/privatkredit/info/glossar/konsumkreditgesetz">KKG</a>, a personal loan agreement must contain the following information:
<ul>
 <li>The net loan amount</li>
 <li>The <a href="/privatkredit/info/glossar/effektiver-jahreszins">effective annual interest rate</a> or, if this is not possible, the annual interest rate and the fees charged upon the conclusion of the contract</li>
 <li>The conditions under which the interest rate and costs (see above) may be changed</li>
 <li>Costs that may arise that are not included in the effective annual interest rate</li>
 <li>Maximum loan amount, if any</li>
 <li>Repayment details, in particular the instalment amount, number of instalments, frequency of instalment payments and if possible, the total sum of all the instalment payments</li>
 <li>Information pertaining to any waiver of interest and any refund of costs on the unused loan term if the loan is <a href="/privatkredit/info/glossar/vertragsaufloesung">paid off early</a></li>
 <li><a href="/privatkredit/info/glossar/widerrufsrecht">Right of withdrawal and cooling-off period</a></li>
 <li>Any required collateral</li>
 <li>The portion of the borrower's income on which the <a href="/privatkredit/info/glossar/kreditfaehigkeitspruefung">credit capacity check</a> was based</li>
</ul>

Personal loan agreement: information and checklist

privatkreditvertrag

What is payment protection insurance and when does it make sense? Find out more about the terms and conditions and benefits of payment protection insurance for a loan.

Most lenders take out group insurance to protect themselves in the event that a borrower dies. In this case, the outstanding debt will be covered by the insurance.
Other insurance benefits such as <a href="/privatkredit/info/glossar/versicherung-arbeitsplatzverlust">loss of job</a> are usually paid for by the borrower.
Depending on the product, instalment insurance will cover involuntary unemployment, temporary incapacity for work, illness or accident, up to complete incapacity for work with disability pension.
The terms and conditions and insurance cover vary from provider to provider with regard to the following:
<ul>
 <li>Waiting periods</li>
 <li>Maximum number of instalments per claim</li>
 <li>Maximum instalment amount per month</li>
 <li>Maximum number of covered instalments per contract</li>
</ul>
Some <a href="/privatkredit/info/glossar/kreditgeber">lenders</a> insure <a href="/privatkredit/info/glossar/kreditnehmer">borrowers</a>&nbsp;free of charge against temporary and total incapacity for work.

Payment protection insurance: insurance for your loan

restschuldversicherung

Are instant or express loans recommended for anyone needing money as soon as possible? How legitimate are they?

Unscrupulous lenders use the term &ldquo;instant loan&rdquo; to tempt customers. Sometimes called &ldquo;debt relief&rdquo; or &ldquo;debt consolidation&rdquo; companies (Finanzsanierer in German), these money lenders are based abroad and demand high and non-transparent fees without providing anything in return.
Note that the law prohibits aggressive advertising of consumer loans. It refers to the credit industry's own &ldquo;convention concerning restrictions on advertising and prevention&rdquo;. According to this convention, lenders may not:
<ul>
 <li>Give the impression that consumer loans may be obtained particularly quickly and with no need for a <a href="/privatkredit/info/glossar/kreditfaehigkeit">credit capacity</a> check</li>
 <li>Explicitly use the terms &ldquo;express loans&rdquo;, &ldquo;credit check in 30 minutes&rdquo;, &ldquo;instant loans&rdquo; or &ldquo;instant cash&rdquo;</li>
</ul>
Legitimate lenders will therefore never use these terms in their advertising or in their promises to their customers.
To protect consumers and prevent excessive debt, all <a href="/privatkredit/info/glossar/konsumkredit">consumer loans</a> are subject to a waiting or cooling-off period of 14 days before they are paid out (or <a href="/privatkredit/info/glossar/auszahlung-privatkredit">disbursed</a>). What is advertised as an instant loan is generally just a standard personal loan. What this means:
<ol>
 <li>They are processed in exactly the same way as any other instalment loan, with the same credit checks. The process is not simplified and the loan is not paid out more quickly.</li>
 <li>Both a credit check and a budget calculation are carried out according to the guidelines of the Consumer Credit Act.</li>
 <li>The loan application is recorded at the <a href="/privatkredit/info/glossar/zentralstelle-kreditinformationen-zek">Central Office for Credit Information (ZEK)</a> and the Association for the Management of an <a href="/privatkredit/info/glossar/informationsstelle-konsumkredit-iko">Information Centre for Consumer Credit (IKO)</a>.</li>
 <li>There is a 14-day <a href="/privatkredit/info/glossar/widerrufsrecht">cooling-off period</a> from the time the loan is approved or the agreement issued until the loan is paid out.</li>
</ol>
This period does not apply to loans not subject to the <a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act (KKG)</a>. These loans can be paid out as soon as they have been approved and the agreement issued. However: <a href="/privatkredit/info/glossar/kreditgeber">lenders</a> will still check the <a href="/privatkredit/info/glossar/bonitaet">credit standing</a> of a borrower carefully, particularly if the required loan amount is high. These loans are not considered instant loans either.

Instant loans: how legitimate are they really?

sofortkredit

What happens to a loan if you lose your job or have an accident during the loan term?

A <a href="/privatkredit/info/glossar/kreditnehmer">borrower</a> can take out instalment insurance to cover involuntary unemployment.
The borrower&rsquo;s right to have their instalments paid is clearly regulated by each lender.
Basically, the following applies:
<ul>
 <li>The employer terminates the employment contract.</li>
 <li>Notice of termination is given at the earliest after a defined period following the conclusion of the loan agreement, for example, 60 days.</li>
 <li>The borrower is unemployed for a defined period (e.g. 60 or 90 consecutive days).</li>
 <li>Depending on the contract, the monthly instalments may be reduced for a defined period or may not have to be paid at all.</li>
</ul>
Since the criteria for the insurance company paying out are strictly defined and this insurance increases the <a href="/privatkredit/info/glossar/kreditkosten">loan costs</a>, it is worth examining the terms and conditions carefully.

Loss of job: instalment insurance for loans

versicherung-arbeitsplatzverlust

Is it possible to terminate a loan agreement earlier than agreed and repay the loan?

Borrowers may repay a loan early, including any outstanding interest, and terminate the agreement. This option, regulated in the <a href="/privatkredit/info/glossar/konsumkreditgesetz">Consumer Credit Act (KKG)</a>, is designed to ensure that consumers can exit a current agreement without obstacle.
According to the KKG, consumers are entitled to a waiver of interest and a refund of the costs on the remaining term in this case.
Since in practice all costs are usually bundled into the effective interest rate, no costs are reimbursed. One common exception is <a href="/privatkredit/info/glossar/restschuldversicherung">payment protection insurance</a>.
On the other hand, banks are allowed to charge processing fees for the extra administration involved in the early repayment of a loan, and frequently do so.
However, as there is no interest to pay on the remaining term, this reduces the overall <a href="/privatkredit/info/glossar/kreditkosten">loan costs</a>.

Early loan repayment: information & benefits | comparis.ch

vertragsaufloesung

When is interest on arrears charged, and what are the consequences of this?

Lenders may charge interest on loan arrears. According to the Consumer Credit Act, they may not charge more than the <a href="/privatkredit/info/glossar/effektiver-jahreszins">effective annual interest rate</a> defined in the personal loan agreement.
Reminder fees are also charged, which differ from lender to lender.
Lenders are also obliged to report late payments to the <a href="/privatkredit/info/glossar/informationsstelle-konsumkredit-iko">IKO</a> if they add up to 10% or more of the net loan amount. They also report payment habits to the <a href="/privatkredit/info/glossar/zentralstelle-kreditinformationen-zek">ZEK</a>. Entries such as &ldquo;slow payment&rdquo; or &ldquo;in arrears&rdquo; have an adverse and lasting effect on a person's <a href="/privatkredit/info/glossar/bonitaet">credit standing</a>.
Note: if you cannot pay your instalments and have to arrange a special repayment plan with the bank, this is also recorded in the ZEK database and has a negative effect on your credit standing. It can therefore be helpful to request an extension to your loan term and maybe even switch lenders in order to reduce the monthly instalment amount.
You can review the options for <a rel="noopener noreferrer" href="/privatkredit/kreditratgeber/kredit-abloesen">refinancing a loan</a> at Comparis.
If the loan was taken out via a <a href="/privatkredit/info/glossar/kreditvermittler">credit broker</a>, you should seek advice from them before making a decision.

Interest on arrears: facts & figures | comparis.ch

verzugszins

Why is a loan only paid out after 14 days?

According to the Consumer Credit Act, borrowers have 14 days in which they may withdraw from their personal loan agreement in writing.
When this period starts is defined differently by each <a href="/privatkredit/info/glossar/kreditgeber">lender</a>:
<ul>
 <li>14 days from receipt of the agreement, receipt being defined as one day after the date the agreement was posted</li>
 <li>The day after the date printed on the agreement, plus 14 days</li>
</ul>
The loan is <a href="/privatkredit/info/glossar/auszahlung-privatkredit">paid out</a> at the end of this cooling-off period.

Right of withdrawal for loans | Cooling-off period & information | comparis.ch

widerrufsrecht

What is the Central Office for Credit Information (ZEK) and what data is stored there?

The Central Office for Credit Information (ZEK) collects and provides information on personal loans, leases and credit cards. All major lenders are members of the ZEK. The list of ZEK members is therefore a reliable source for verifying the trustworthiness of a <a href="/privatkredit/info/glossar/kreditgeber">lender</a>.
The following details are stored in the ZEK database:
<ul>
 <li>First and last name of the borrower</li>
 <li>Date of birth</li>
 <li>Address</li>
 <li>Occupation</li>
 <li>Marital status</li>
 <li>Information on loan applications (open and rejected), current and expired agreements, credit cards (blocked, withdrawn or whose cardholder has not met their payment obligations) and payment behaviour</li>
</ul>
ZEK members are required to enter this information in the database. This ensures that when lenders receive a <a href="/privatkredit/info/glossar/privatkreditantrag">personal loan application</a>, they can access comprehensive information on the potential borrower. Only ZEK member companies have access to ZEK data.
Difference between ZEK and <a href="/privatkredit/info/glossar/informationsstelle-konsumkredit-iko">IKO</a>: the ZEK database contains significantly more data than that of the IKO, including loans that are not subject the Consumer Credit Act and expired agreements. The information provided by the ZEK is designed to minimize the risk of default for lenders.
The ZEK is subject to data protection laws. Anyone is entitled to request <a target="_blank" rel="noopener noreferrer" href="https://www.zek.ch/de-ch/kredit-leasingnehmer/eintrage-zu-meiner-person ">personal information</a>&nbsp;(link in German and French only) stored about themselves. To do this, you need to send an information request form, with a handwritten signature, together with a copy of an official ID (identity card, passport, driving licence) to the ZEK. The ZEK is then legally required to provide the information within 30 days.
ZEK website (in German and French only): <a target="_blank" rel="noopener noreferrer" href="https://www.zek.ch">www.zek.ch</a>

Glossary – Personal loans

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