Loan requirements in Switzerland

To get a personal loan in Switzerland, you have to pass the lender’s credit check. The law makes every lender that lends as a business check that you can repay without dropping below your minimum subsistence level. Beyond that, each lender sets its own rules on age, residence permit, income and credit records. This guide goes through each point, what the law says about it, and what lenders ask for.

What the law requires

The Federal Act on Consumer Credit (Konsumkreditgesetz, KKG) sets one firm requirement: before signing, the lender must check your creditworthiness (KKG, Art. 27a). The aim, in the words of the law, is to avoid over-indebtedness (KKG, Art. 22).

The law covers consumer credits from CHF 500 to CHF 80’000 (KKG, Art. 7). Above that amount, the KKG and its credit check rules don’t apply. Ask the lender which rules it follows.

What the KKG does not set is just as useful to know. It has no rule on nationality, no list of accepted residence permits and no minimum income. Those rules come from each lender. That is why one lender can say yes where another says no.

The credit check, step by step

The law sets how the check works (KKG, Art. 28):

• The test. You must be able to repay the credit without using the part of your income that can’t be seized in debt collection. That part is your Existenzminimum (minimum subsistence level).
• How it is worked out. The lender uses the guidelines of your canton of residence for calculating the minimum subsistence level.
• What it must always count. Your actual rent, your taxes according to the withholding tax table, and the commitments already recorded at the IKO, the information office for consumer credit.
• The 36-month rule. The lender must assume the loan is repaid within 36 months, even if your contract runs longer. The same applies to earlier consumer credits you are still repaying.

The 36-month rule matters if you want a long term. A longer term lowers your monthly payment, but the check still looks at what you could repay over 36 months. So a long term does not, by itself, let you borrow more.

The lender may rely on what you tell it about your finances, unless it is plainly wrong or contradicts the IKO records. If it doubts what you say, it must check it against official or private documents (KKG, Art. 31). Give accurate figures from the start.

The guide how much can I borrow shows how to work out a monthly payment that fits your budget before you apply.

Age

You are of age in Switzerland at 18 (Swiss Civil Code, Art. 14). If you are under 18, a consumer credit contract is valid only with the written consent of your legal representative, given at the latest when you sign (KKG, Art. 13).

The KKG sets no other age rule, so each lender decides its own age limits. Ask before you apply.

Where you live and your residence permit

If you are not Swiss, lenders will ask about your residence permit. The KKG has no rule on permits, so each lender sets its own: which permits it accepts, and for how long you must have held one.

The State Secretariat for Migration (SEM) describes the main permits like this:

Swizeo lends to people living in Switzerland, a state of the European Union, Iceland, Liechtenstein or Norway.

The guide to loans with a residence permit goes into each permit and what lenders look at.

Income and budget

There is no legal minimum income. What counts is whether the monthly payment fits after your fixed costs and your minimum subsistence level, as set out above. A lender may add a minimum of its own.

Your income can come from a job, self-employment or another source. The law lets the lender ask for a salary statement, or, if you are not employed, other documents that show your income (KKG, Art. 31). If you work for yourself, the guide to loans for the self-employed explains what that means in practice.

Before you apply, list what comes in and what goes out each month: rent, health insurance, taxes, transport, other loans and leasing, and the people you support. What is left is the most a new payment can take, and it is wise to leave room for the unexpected.

The reason we ask: the payment must fit your budget.

Your credit records

Switzerland has no single credit score. Lenders look at several records, and you can see each of them yourself.

• IKO, Informationsstelle für Konsumkredit (information office for consumer credit). The office the KKG requires. Lenders must report every consumer credit they grant to it, and arrears once unpaid instalments reach 10 % of the net amount (KKG, Art. 23 and 25). The commitments recorded there must be counted in your credit check (KKG, Art. 28). You can order your own extract free of charge with the online form on iko-info.ch; it comes by letter post.
• ZEK, Zentralstelle für Kreditinformation (central office for credit information). It holds positive and negative information on credits, leasing and cards, payment defaults, and official information such as bankruptcies. Your own extract is free and comes by letter post (zek.ch).
• The Betreibung (debt collection) register. It shows whether debt collection proceedings were opened against you in the past 5 years, in the district where you order the extract (ch.ch).

The law does not say that an entry rules you out. Each lender decides how it treats an open or paid Betreibung, or a negative ZEK entry, so the same entry can mean no at one lender and a closer look at another. Ask for the lender’s rule before you apply.

At Swizeo:

• The reason we ask: open debt collection affects what you can afford.
• The reason we ask: they show credits you already repay.

Read what lenders check for each record in detail, ZEK and IKO explained for those two offices, and getting a loan with a Betreibung if you have an entry.

Documents

The KKG names two documents a lender may ask for: an extract from the debt collection register, and a salary statement or other proof of income (KKG, Art. 31). Beyond those, lenders ask for what they need to identify you and apply their own rules.

You order the debt collection extract from the debt collection office (Betreibungsamt) for the place where you live. It costs CHF 17 plus postage (ch.ch). If you moved in the past 5 years, you need one from each district you lived in for the full picture. The guide to ordering a debt collection extract shows how.

At Swizeo, have your ID or passport ready, and your residence permit if you have one. When the application asks for a document, it says why.

If you are self-employed, retired or young

The law sets the same credit check for everyone. The 36-month rule and the minimum subsistence level apply whatever your situation. What changes is how you show your income and which rules a lender adds.

• Self-employed. There is no salary statement, so the lender can ask for other documents that show your income (KKG, Art. 31). See loans for the self-employed.
• Retired. The KKG has no separate rule for retirees. Without a salary statement, you show your income with other documents (KKG, Art. 31). Lenders may set an upper age limit of their own.
• Under 18. A contract needs the written consent of your legal representative (KKG, Art. 13).

If you don’t meet a requirement

• Ask why. A clear reason helps you decide what to do next. If Swizeo says no, we tell you the reason, as far as the rules allow, and what you can do. The guide loan rejected: what now covers your options.
• Check your records. Order your IKO, ZEK and debt collection extracts, so you see what a lender sees. If an entry is wrong, contact the office that holds it.
• Be careful with easy promises. Every lender that lends as a business must check your creditworthiness (KKG, Art. 27a). An offer «without a credit check» or one that asks for a fee before payout is a warning sign. See loans without a credit check and spotting loan scams.
• If money is already tight, get free help first. A new loan can make it harder. Schuldenberatung Schweiz, the umbrella organisation of the non-profit debt advice offices, lists the offices by canton and runs a free hotline on 0800 708 708 (schulden.ch). See debt help in Switzerland.

Swizeo’s requirements at a glance

A person on our credit team decides on every application. Every loan has the same fixed interest rate of 3 % a year, an effective annual rate of about 3.04 %.

Next step

Check our requirements, with the reason for each one, on the personal loan page before you apply. If one of them rules you out, better to know now.