PERSONAL LOANS

Instant loan scams – what to watch out for

In Switzerland, instant loans promise fast help to those in dire financial straits and are often referred to as "express loans" or "quick loans". We explain why you should be careful with such offers.

26.04.2023

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1.What is an instant loan?
2.Instant loans: what applies in Switzerland
3.How fast can you get an instant loan?
4.Are there any exceptions to this deadline?
5.What are the alternatives to instant loans?

1. What is an instant loan?

Alleged fast access to money is advertised using buzzwords such as "express loans", "payday loans" or "quick loans". But the instant loans advertised in this way are not even available in Switzerland. These sales gimmicks can be usually traced back to dubious companies that are not licensed lenders.

However, some legitimate lenders also advertise instant loans, even though they don't actually offer them. Often they claim to be able to grant immediate loans, while in reality doing nothing more than prioritizing the loan applications or processing them faster than usual where possible. This is something any professional lender can do.

Find out more about types of loan in Switzerland.

2. Instant loans: what applies in Switzerland

Advertising instant loans has been explicitly prohibited in Switzerland under the credit industry's self-regulation agreement that entered into effect on 1 January 2016. This is because it constitutes misleading advertising that falsely suggests that consumer loans can be obtained particularly quickly and without the need for a detailed credit check.

3. How fast can you get an instant loan?

Dishonest lenders and debt consolidation companies claim to pay out a loan in 3 or 10 minutes. However, every borrower and lessee has a 14-day cooling-off period during which they can cancel the contract. This is why a loan is only paid out after a 14-day waiting period.

  • Advertising peppered with buzzwords such as "instant loan", "express loan", "instant approval" etc.

  • Promising a decision in a matter of hours or even minutes

  • Clumsy language, spelling mistakes

  • No clear postal address, no Swiss address

  • No references to independent information centres such as the Central Office for Credit Information (ZEK) or to debt advisors

  • Note on the website that "no loans are provided", even though these websites make explicit use of the word "loan" in paid search marketing

  • There are lenders that warn against loan fraud on their own websites by, for example, providing links to external lists of public warnings where they themselves feature

Find out more about how to avoid unscrupulous lenders.

4. Are there any exceptions to this deadline?

There are no exceptions within the Consumer Credit Act (not available in English). The right of withdrawal period is always 14 days. The only loans that do not have to observe this cooling-off period are those that are not subject to the Consumer Credit Act:

  • When the loan amount exceeds CHF 80,000

  • When the repayment term is less than three months

Customers can get their credit check prioritized and receive a decision as quickly as possible. They can also help to speed up the processing of their loan by submitting all the necessary documentation without delay. If the loan is approved, the money is paid out at the end of the cooling-off period.

When might taking out a loan be a suitable option?

A consumer loan to finance the purchase of a car, motorcycle, furniture or expensive electrical devices can help you buy the items you want more quickly. A loan can also be a good way of bridging any short-term payment difficulties. But you shouldn't take out a consumer loan if it merely postpones dealing with a financial problem or even makes it worse. Those with persistent financial difficulties would be well advised to consult a debt counselling organization such as Schuldenberatung Schweiz (website in German and French only).

5. What are the alternatives to instant loans?

Instant loans are prohibited by law in Switzerland. But you can get a consumer loan within 14 days. At Comparis you'll find a comparison of various providers. Brokers like Credaris can help you find the right loan for you.

Submit a loan enquiry

This article was first published on 26.02.2019

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Approval of a loan is forbidden by law if it would lead to over-indebtedness (Art. 3 UWG).