Refinancing and consolidating loans in Switzerland

Refinancing means taking out a new loan to pay off credits you already have. Consolidating means doing it for several credits at once, so you are left with one loan and one monthly payment. It can lower your monthly payment, your total cost, or both, but not always. A longer term almost always lowers the payment and raises the total. So compare what you still owe today with what the new loan costs in total, and if payments are already hard, talk to a non-profit debt advice service before you take on anything new.

What refinancing and consolidating mean

In German you will see Umschuldung (refinancing) and Kreditablösung (replacing a credit). In French, the usual words are regroupement de crédits (combining credits) and rachat de crédit (buying back a credit). They all describe the same move: the new loan pays off the old credits, and from then on you repay only the new one.

The credits in question are often more than cash loans. Under the Consumer Credit Act (Konsumkreditgesetz, KKG), credit and customer cards with a credit option (the option to pay the balance in instalments), overdrafts with a credit option, and some leasing contracts for private use count as consumer credit too (KKG Art. 1). A new loan can pay off any of them, but each one ends on its own terms, as set out below.

Two kinds of refinancing are worth telling apart:

• Like for like. The new loan pays off exactly what you owe, over about the same time. The point is a lower rate, or one payment date instead of several.
• Longer or larger. The new loan runs for longer, or adds money on top (in German, aufstocken, to top up). The monthly payment may drop, but you pay interest for longer, or on more.

The first kind can save money. The second kind often costs more in total, even when it feels lighter each month.

When refinancing can make sense

Refinancing tends to help in a few clear situations:

• Your current credits cost more than the new loan would. Compare the effective annual rate (effektiver Jahreszins) of each credit. It expresses the whole cost of a credit, interest and other costs together, as a yearly percentage of the amount (KKG Art. 5 and 6).
• An older loan was signed when the legal maximum was higher. The maximum rate for cash loans has been 10 % since 1 January 2026 (Federal Office of Justice, notice of 31 October 2025). A contract keeps the maximum that applied when it was signed (VKKG Art. 9a), so an older loan can cost more than any new cash loan may cost today.
• Card balances you pay off in instalments. For cards and overdrafts with a credit option, the maximum is higher: 12 % since 1 January 2026 (same notice). Moving such a balance to a cash loan at a lower rate can cut the cost, if you stop adding to the card.
• Several payment dates are hard to keep track of. One payment is easier to plan for. This is a fair reason on its own, as long as the total does not rise much.

Refinancing does not help when the new loan costs the same or more, or when the only gain is a lower payment bought with a much longer term.

The downside: a longer term costs more

A loan’s monthly payment goes down when you spread it over more months. The interest goes up, because you pay it for longer. Swizeo’s own example on its personal loan page shows the effect for CHF 10’000 at an interest rate of 3 % a year, an effective annual rate of 3.04 %:

The payment over 36 months is about a third of the payment over 12 months. The interest is close to three times as much. The same thing happens when you refinance: if the new loan runs longer than your current credits would have, you can pay more in total even at a lower rate.

Three more costs are easy to miss:

• Topping up. Borrowing more on top of what you owe raises your debt, and the interest with it. Caritas debt advice describes a pattern it calls a Kettenkredit (chain credit): each new loan buys back the last one and adds a little more. Each new loan needs a new check of your budget, and the debt can keep growing.
• Ending the old credits. For a consumer credit under the Act, you may pay back early. You then owe no interest for the time you no longer use the credit, and the other costs for that time must be reduced fairly (KKG Art. 17). A leasing contract is different: you can end it with at least 30 days’ notice, to the end of a three-month leasing period, and the leasing company can claim compensation according to the table in your contract (KKG Art. 17). Ask each lender for the exact amount to settle before you decide.
• Using the old credit again. If the new loan pays off a card or an overdraft and you keep using it, you can end up with the new loan and a new balance.

How to compare your credits with one new loan

Put the figures side by side before you apply. Your contracts and statements hold most of them, and each lender can tell you the rest.

1. List what you owe today. For each credit, note:

2. Work out the new loan. It has to cover the settlement figures of every credit you want to pay off, plus any cost of ending them early. Use the loan calculator to see the monthly payment and the total to repay for that amount, over the term you have in mind.

3. Compare two numbers, not one. Set the total you would still pay on your current credits against the total to repay on the new loan. Then compare the monthly payments. The best case is a lower total and a payment you can carry. A lower payment with a higher total is a trade: you buy breathing room now and pay for it later. Decide on purpose, not by accident.

4. Try a shorter term. If the new loan’s total is higher, see what the payment would be over fewer months. A term close to the time left on your current credits keeps the comparison fair.

Calculator

Your loan against one new loan

Type what your lender tells you: the amount to settle your loan today, the payments left, and its monthly payment or its effective annual rate. The tool sets what you would still pay against one new loan at 3 % for the same amount. Nothing you type is sent or stored.

This tool needs JavaScript. Without it, the steps in this section work with pen and paper.

Our guides on rates and costs and on how to compare loans explain each figure in a loan offer.

What the new lender checks

A new loan to pay off old ones is a new consumer credit, so the full credit check applies. Before you sign, the lender must check your creditworthiness (KKG Art. 27a), and it must ask the IKO (Informationsstelle für Konsumkredit, the information office for consumer credit) about you. The IKO says this duty applies again whenever a consumer credit is renewed or replaced.

The test itself is set in the law (KKG Art. 28):

• You must be able to repay the credit without using the part of your income that can’t be seized in debt collection, your Existenzminimum (minimum subsistence level). The lender works it out with the guidelines of your canton of residence.
• It must count your actual rent, your taxes according to the withholding tax table, and the commitments recorded at the IKO.
• It must assume the credit is repaid within 36 months, even if your contract runs longer. The same applies to earlier consumer credits you have not yet repaid.

The 36-month rule matters for refinancing. A longer term lowers your payment, but it does not, on its own, let you borrow more. If the credits you want to combine add up to more than you could repay over 36 months, the check may say no, whatever term you ask for.

The lender may rely on what you tell it about your finances, unless it is plainly wrong or contradicts the IKO. It can ask for a debt collection extract and a salary statement, or other proof of income if you are not employed (KKG Art. 31). Our guide what lenders check explains each record, and ZEK and IKO explained shows what the two credit databases hold.

Two more rules from the Act apply to the new loan as to any other:

• Amount. The Act covers credits from CHF 500 to CHF 80’000 (KKG Art. 7). If your credits together come to more, ask the lender which rules apply.
• Withdrawal. You can withdraw from a consumer credit contract in writing within 14 days. The period starts when you receive your copy of the contract (KKG Art. 16).

When refinancing is not the answer

A new loan moves debt from one lender to another. It does not make the debt smaller. If your budget does not cover your payments today, a loan with a lower payment and a longer term may only push the problem further out.

Caritas debt advice says from its experience that a credit should be taken out only after careful thought, and never to bridge a financial shortfall. Be especially careful if any of these apply:

• You are already behind on one or more payments.
• You have open Betreibungen (debt collection proceedings) or receive reminders from several creditors.
• You use one credit to pay another, or a card to cover everyday costs.
• You would need a top-up to make the numbers work.

In those cases, talk to a non-profit debt advice service first. Their advice is for people who risk falling into debt or are already over-indebted. If there is enough money to make your creditors an offer, from savings or from what your budget leaves over, a Schuldensanierung (debt settlement) may be possible: an agreement with all your creditors to repay the debts in full by instalments, or only a part of them. It needs the creditors’ consent, and Caritas recommends doing it with a reputable debt advice office that is a member of Schuldenberatung Schweiz, the umbrella organisation of the non-profit offices.

Schuldenberatung Schweiz lists the offices by canton and runs a free hotline on 0800 708 708, Monday to Thursday from 10:00 to 13:00 (schulden.ch). With your consent, a debt restructuring service named by your canton can also see your IKO data for your case (KKG Art. 24).

Our guide debt help in Switzerland explains the options in more detail. If you are not sure what you can afford, how much can I borrow walks through a budget. If lenders have already turned you down, read loan rejected: what now before you apply again.

Questions to ask before you sign

• What is the effective annual rate of the new loan, and of each credit it replaces?
• What is the total to repay on the new loan, and what would I still pay on my current credits?
• Is the new term longer than the time left on my current credits? By how much does that raise the total?
• Am I borrowing more than I need to pay off the old credits? Why?
• What does it cost to end each old credit early, including any leasing contract?
• Who pays the old lenders, and when? Does that happen before or after the 14-day withdrawal period?
• Will I close the cards or overdrafts the loan pays off?

If a lender pushes you to borrow more than you asked for, or to decide on the spot, take that as a reason to slow down.

Refinancing at Swizeo

Our terms are the same for every loan we grant:

• An interest rate of 3 % a year, fixed for the whole term and the same for every loan. The effective annual rate is about 3.04 %.
• CHF 1’000 to CHF 1’000’000, over 6 to 84 months.
• You can pay back early at any time, in full or in part.
• No payment protection insurance.

We say the same thing on our personal loan page: combining credits can take longer to pay off and cost more, so compare both totals. And if bills are already hard to pay, a new loan can make it harder, while free debt advice can help.

Next step

Add up the settlement figures of the credits you want to replace. Put that amount and a term into the loan calculator, and compare its total to repay with what you would still pay on your current credits.