The right to withdraw from a loan in Switzerland

In Switzerland you can withdraw from a consumer credit contract, such as a personal loan, within 14 days. You do it in writing. The 14 days start when you receive your copy of the contract, and you are on time if you hand your withdrawal to the lender or to the post office on the last day (KKG Art. 16). The Act asks for no reason. If the money was already paid out, you pay back what you received, in equal monthly instalments by the end of the agreed term, and you owe no interest and no costs (KKG Art. 15 and 16). No contract can take this right away (KKG Art. 37). At Swizeo we pay the money out only after the withdrawal period.

This guide covers Swiss law: the Consumer Credit Act (Konsumkreditgesetz, KKG; in French and Italian LCC).

The rule at a glance

Which contracts you can withdraw from

The right covers the consumer credits of the Act (KKG Art. 1, 8 and 16):

• cash loans, such as personal loans, and credits that pay for goods or services
• leasing of goods for your private use, where the rates rise if the contract ends early
• credit and customer cards, and overdrafts on a current account, when they come with a credit option, meaning you can pay the balance in instalments

There is one exception. If a lender tacitly accepts an overdraft and the account stays overdrawn for more than three months, there is no right to withdraw (KKG Art. 12 and 16).

The Act does not apply at all to some credits, among them credits under CHF 500 or over CHF 80’000, credits secured by a mortgage, credits covered by usual bank collateral you have deposited or by enough assets you hold with the lender, credits with no interest and no fees, and credits you must repay within three months (KKG Art. 7). Its right to withdraw does not cover them.

When the 14 days start and end

• The start. The period starts when you receive your copy of the contract (KKG Art. 16). A consumer credit contract must be made in writing, and you must get a copy (KKG Art. 9, 11 and 12).
• What you withdraw. You withdraw your offer to enter the contract, or your acceptance of the lender’s offer, whichever you gave (KKG Art. 16).
• The end. You are on time if you hand your withdrawal to the lender or to the post office on the last day of the period (KKG Art. 16). It does not have to reach the lender by then.
• Your contract must state it. A consumer credit contract must name your right to withdraw and the period for it (KKG Art. 9; for leasing, Art. 11). A contract that leaves this out is void. For a loan, you then repay the amount you received by the end of the term, and owe no interest or costs. For leasing, you return the item and pay the rates due up to then (KKG Art. 15).

Write down the day you receive your copy. If you are unsure which day is the last one, don’t wait for it: send your withdrawal as soon as you have decided.

How to withdraw

1. Put it in writing. The Act asks for writing (KKG Art. 16). Write a short letter with your name and address, the number and date of the contract, and a sentence saying that you withdraw from it. Date it and sign it.
2. Send it to the address in your contract. Registered post gives you a receipt with the date you handed the letter in, and that date is what counts (KKG Art. 16).
3. Keep a copy of the letter and the receipt.
4. Ask the lender to confirm in writing that the contract has ended and, if the money was already paid out, how it wants the money back.

What happens after you withdraw

• No money paid out yet. You have received nothing, so there is nothing to pay back.
• Money already paid out. You repay the amount you received or used, by the end of the agreed term, and you owe neither interest nor costs. You repay it in equal instalments, one a month unless the contract set longer intervals (KKG Art. 15 and 16).
• A purchase on instalments, a service on credit, or leasing. Here a rule of the Code of Obligations applies (KKG Art. 16): both sides give back what they received. If you have already used the item, you owe a fair rent for it. If a service was already provided, you repay the provider’s outlays and expenses. You owe no further compensation (OR Art. 40f). If you misused the item during the withdrawal period, you owe fair compensation for its loss of value (KKG Art. 16).
• A loan from several lenders through a crowdlending platform. You can withdraw from each lender, or from all of them with one declaration to the platform. If you use the one declaration, the 14 days start when you receive a copy of the last contract signed with a lender (KKG Art. 2 and 16).

Withdrawing or paying back early

Within the 14 days, withdrawing is the cheaper way out. If the money was paid out, you repay it without interest or costs (KKG Art. 15 and 16). After the 14 days, you can still pay back early. You then owe no interest for the time you no longer use the credit, but the interest for the time you did use it stays due (KKG Art. 17). The guide paying a loan back early shows how much that saves.

Things to watch for

• Pressure to decide fast. The right comes from the Act, and a contract may not take it away or make it worse for you (KKG Art. 37). Use the 14 days to read the contract again.
• The right start date. The 14 days count from your copy of the contract, not from the day you applied or the day the money arrives (KKG Art. 16).
• Money paid out during the 14 days. If a lender pays out before the period ends and you then withdraw, you have to repay that money (KKG Art. 15 and 16). Leave it untouched until you are sure.
• Requests for money. If anyone asks you for a fee before a loan is paid out, read spotting loan scams first.

Withdrawing at Swizeo

We send the money only after the withdrawal period. If you withdraw in time, nothing has been paid out, so there is nothing to pay back.

Next step

Before you apply, read the terms of a Swizeo loan and what we check on the personal loan page. The guide how to apply takes you through each step, from the application to the payout.