Loan, leasing, credit card or pay later

There are four common ways to spread the cost of something: borrow the money with a personal loan, lease the item, pay with a credit card whose balance you can pay off in instalments, or choose a pay-later offer at the checkout. The Consumer Credit Act (Konsumkreditgesetz, KKG) treats the first three as consumer credit, each with its own set of rules (KKG Art. 1 and 8). A pay-later offer is covered only in some cases: the Act does not apply to credit with no interest and no other charges, to credit you must repay within three months, or to amounts under CHF 500 (KKG Art. 7). Before you choose, compare the total cost, what ending early would cost, who owns the item, and what the law does for you if a payment is missed.

The four side by side

Article numbers in this guide refer to the KKG unless another law is named. The IKO (Informationsstelle für Konsumkredit) is the information office for consumer credit, which every lender must check before it grants a consumer credit (KKG Art. 28).

What the law counts as consumer credit

The Act covers a credit that a lender grants or promises to a private person, as a deferred payment, a loan or a similar way of financing (KKG Art. 1). It names two more kinds: leasing of goods for private use, when the rates rise if the contract ends early, and credit and customer cards or overdrafts with a credit option (KKG Art. 1).

The Act does not apply to these, among others (KKG Art. 7):

• credit granted with no interest and no other charges
• credit with no interest, if you agree to repay it in a single payment
• credit under CHF 500 or over CHF 80’000
• credit you must repay within three months
• credit secured by a mortgage, or covered by usual bank collateral or by enough assets you hold with the lender

Caritas debt advice sums it up this way: the Act applies in particular to credit with interest and other costs, repaid over more than three months, for CHF 500 to CHF 80’000. Where the Act applies, its rules may not be changed to your disadvantage (KKG Art. 37).

A personal loan

A personal loan is a cash loan: the lender pays you a sum of money, and you repay it in monthly instalments. What you buy with it is yours.

• The contract. It must be in writing and you get a copy. It states, among other things, the net amount, the effective annual rate, the repayment terms and, where possible, the total you will pay, and your rights to repay early and to withdraw (KKG Art. 9). If the credit pays for a particular purchase, the contract must also give the cash price and the price under the credit, and name the owner if the goods do not become yours at once (KKG Art. 10).
• The cost. The effective annual rate is the total cost of the credit, interest and other costs, as a yearly percentage of the amount (KKG Art. 6). Its legal maximum for a cash loan has been 10 % since 1 January 2026 (VKKG Art. 1; FOJ, 31 October 2025).
• The credit check. The lender must check that you can repay the credit within 36 months without touching the part of your income that can’t be seized, even if the contract runs longer (KKG Art. 28).
• Changing your mind. You can withdraw within 14 days, in writing (KKG Art. 16). You can also repay early, and you then owe no interest for the time you no longer use the credit (KKG Art. 17).

Our guide taking out a loan in Switzerland explains each step, from the first figures to the payout.

Leasing

With leasing, you take an item and use it before it is paid for, in return for regular payments, and often without ever owning it, as Caritas debt advice describes it. Cars are the typical case. Only part of the Act applies to leasing, set out in a list (KKG Art. 8).

• The contract must describe the item and give its cash price, the number and amount of the rates, any deposit, any insurance you must take, the effective annual rate, and a table of what you would owe if the contract ended early, with the item’s residual value at that point (KKG Art. 11).
• The cost. The effective annual rate is worked out from the item’s cash price at the start, its residual value at the end and the leasing rates (KKG Art. 33). The Act’s cap on the rate applies to leasing too (KKG Art. 8 and 14), and the ordinance sets a higher cap only for overdrafts and cards (VKKG Art. 1). Caritas debt advice also lists leasing under the same maximum as cash loans.
• Ending early. You can end the contract with at least 30 days’ notice, to the end of a three-month leasing period. What you then owe follows the table in the contract (KKG Art. 17). Caritas holds that this compensation may not exceed the item’s real loss in value, and warns that it often hides a penalty in practice.
• The credit check asks whether you can pay the rates without touching your minimum subsistence level, or whether assets you own secure them (KKG Art. 29). Unlike a loan, it does not assume repayment within 36 months, Caritas points out.

Our guide car loan or leasing compares the two for a car, line by line.

Credit and customer cards

A card counts as consumer credit only when it has a credit option, meaning you can pay its balance in instalments. The same goes for an overdraft on a current account (KKG Art. 1). Only part of the Act applies to them (KKG Art. 8).

• The contract must be in writing and state the credit limit, the annual rate and the costs charged at signing, the conditions on which they can change, and how the contract can end. You must be told at once of any change to the rate or the costs, for example in a statement (KKG Art. 12).
• The cost. The legal maximum for cards and overdrafts with a credit option has been 12 % a year since 1 January 2026, two points above the cap for cash loans (VKKG Art. 1; FOJ, 31 October 2025).
• The credit check is a summary one, based on what you say about your income and assets. The limit must fit them, and the issuer must count the credits recorded at the IKO. It checks again if it learns that your situation has got worse (KKG Art. 30).
• What gets recorded. Once you use the credit option three times in a row, the amount owed is reported to the IKO, unless it is under CHF 3’000 (KKG Art. 27).
• An overdraft nobody agreed in writing. If a bank tacitly accepts an overdraft and it lasts more than three months, it must tell you the rate and the costs, and there is no right to withdraw (KKG Art. 12 and 16).

If you carry a card balance from month to month, you pay up to 12 % a year on it. Our guide on the maximum interest rate shows how the caps are set.

Pay later

Two members of the National Council describe «buy now, pay later» in their postulates like this: you get the goods at once and pay later, in instalments or in one payment after a set period, often 30 days. The Act does not name pay-later offers. Whether one is covered depends on its terms.

Read three things in the terms:

1. Interest and fees. A credit with no interest and no other charges is outside the Act (KKG Art. 7).
2. When you must pay. A credit you must repay within three months is outside the Act, and so is one with no interest that you repay in a single payment (KKG Art. 7).
3. The amount. A credit under CHF 500 is outside the Act (KKG Art. 7).

If the Act applies, you have the same protections as with a loan: a written contract, a credit check, 14 days to withdraw, the right to repay early, the cap on the rate, and a report to the IKO (KKG Art. 9, 14, 16, 17, 25 and 28). If a lender other than the shop finances the purchase under an exclusive arrangement with the shop, and the goods are not delivered or not as agreed, you can raise against the lender the rights you have against the shop. This needs a purchase above CHF 500, and you must first have tried the shop without success (KKG Art. 21).

If the Act does not apply, none of these protections comes from the Act: no credit check under it, no 14 days to withdraw, no cap on the rate and no report to the IKO. What you owe and when is set by the terms. If you pay late, the general law of obligations applies: when a due date is set, you are in default from the end of that day, without a reminder (OR Art. 102), and you owe default interest of 5 % a year, or the contract’s rate if it is higher (OR Art. 104).

Budgetberatung Schweiz, the umbrella organisation of budget advice services, lists purchases on invoice or in instalments among the typical debt traps. It calls «buy now pay later», leasing and consumer credit tempting, and warns that they can weigh on a budget for a long time and quickly become expensive. If you then can’t repay, reminder fees, interest or new credits are added. Its advice: make a budget first, and save first, then buy.

What Parliament is asking. In June 2026, postulates 26.3978 and 26.3999 asked the Federal Council to report on the risk of debt from buy now, pay later offers in online shopping, and on measures against it. Among other points, they ask which gaps the law has and how an effective credit check can be ensured for these offers. On 26 August 2026 the Federal Council proposed to accept both. On 14 October 2026, Parliament’s page gave the Federal Council’s opinion as the latest step.

What each one costs

The monthly payment is not enough to compare. Look at the total in CHF and at the effective annual rate, which every consumer credit contract must state (KKG Art. 9, 11 and 12).

• Personal loan: the amount, plus all the interest and costs over the term.
• Leasing: every rate, the deposit if you don’t get it back, any insurance the contract requires, and any payment at the end. Ask what happens when the contract ends: whether you return the item, and whether you can buy it, at what price.
• Card with a credit option: the annual rate on the balance you carry, and the costs the contract lists.
• Pay later: any fee in the terms, and what a late payment would cost you.

Calculator

A loan or leasing, in your figures

Type the item’s cash price and the figures of the leasing offer. The tool adds up what the leasing costs and sets it beside a loan at 3 % for the cash price, over the same term. Nothing you type is sent or stored.

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

Our guide how to compare loans explains each figure in a credit offer.

Which one fits

None of them is right for everyone. The facts above point one way or another.

• You want to own the item and stay free to repay early: a loan or a card. Repaying early cancels the interest for the time left (KKG Art. 17).
• You want the use of a car for a set period and will keep the contract to its end: leasing can fit. Read the early termination table and the residual value with care (KKG Art. 11 and 17).
• A balance you can’t clear soon: on a card it costs up to 12 % a year. A loan at a lower rate can cost less, if you stop adding to the card. Our guide refinancing and consolidating shows how to check.
• A small purchase paid later: check whether the Act covers it, and what a late payment would cost.

Loans, leasing contracts and card balances recorded at the IKO count in every later credit check (KKG Art. 28), so each one lowers what you can borrow next.

If repayments are already hard

Paying old debts with new ones can lead to a vicious circle, Budgetberatung Schweiz warns. If you see that clearing your debts will take you longer than three months, it says a debt advice service is the right place to go.

• The hotline of the debt advice services: 0800 708 708, free, Monday to Thursday from 10:00 to 13:00.
• The debt advice office for your region: schulden.ch for German-speaking Switzerland and Ticino, dettes.ch for French-speaking Switzerland and Ticino.

Our guides debt help in Switzerland and making a budget go further.

Swizeo’s personal loan

Swizeo offers a personal loan for private individuals in Switzerland. 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, with interest only to the day you repay.
• No payment protection insurance.

Next step

Enter an amount and a term in the loan calculator. It shows the monthly payment and the total to repay, so you can set them against a leasing offer, a card’s rate or a pay-later plan.