«Instant» loans: what fast really means

In Switzerland, a consumer credit can’t skip the steps the law sets. Before the contract, the lender must check your credit records and whether you can afford the loan. You then get a written contract, and you have 14 days to withdraw. So «instant» can only describe how fast some of these steps go, never that they are left out. The lenders’ advertising convention goes further: the lenders that signed it may not promise particularly fast credit at all. If an offer leads with speed, read it twice.

What «instant» can mean

You will see «Sofortkredit», «Expresskredit», «crédit rapide» or «prestito veloce». The word can stand for very different things:

• a first answer on screen, based only on what you typed
• the lender’s decision, after it has checked your records and your budget
• the money arriving in your account

Only the second is a credit decision, and only the third is money you can use. When an offer says «instant», ask which of the three it means, and what has to happen before the next one.

What must happen before a loan is paid

For a consumer credit from CHF 500 to CHF 80’000, the Consumer Credit Act (Konsumkreditgesetz, KKG) sets these steps for every lender that lends as a business.

1. The credit check, before the contract (KKG, Art. 27a). You must be able to repay without using the part of your income that can’t be seized in debt collection. The lender must count your actual rent, your taxes according to the withholding tax table and the credits already recorded at the IKO, the information office for consumer credit. It must assume the loan is repaid within 36 months (KKG, Art. 28).
2. Your figures, and documents if needed. The lender may rely on what you tell it, unless your figures are plainly wrong or contradict the IKO. It can ask for your debt collection extract and a salary statement, or other proof of income. If it has doubts, it must check your figures against documents (KKG, Art. 31).
3. A written contract, and a copy for you. It must state the net amount, the effective annual rate, the repayment plan, your right to withdraw and to repay early, and the part of your income the check was based on (KKG, Art. 9). A contract that leaves out what the law requires is void: you repay the amount you received in equal instalments over the agreed term, and you owe no interest and no costs (KKG, Art. 15).
4. Your 14 days to withdraw. You can withdraw in writing within 14 days. The period starts when you receive your copy of the contract (KKG, Art. 16).
5. The report to the IKO. The lender reports the credit it has granted (KKG, Art. 25).

The law does not forbid paying out during the 14 days. But if a lender pays out and you then withdraw, you repay the amount in equal instalments over the agreed term, without interest or costs (KKG, Art. 16 and 15).

A lender that seriously breaks the rules of the credit check loses the whole amount it lent, with interest and costs. For a minor breach, it loses the interest and costs (KKG, Art. 32). A lender that follows the law has every reason to check properly, even if that takes longer than an advert would like.

Why serious lenders don’t advertise speed

The KKG forbids aggressive advertising for consumer credit. A deliberate breach can be fined up to CHF 100’000 (KKG, Art. 36a and 36b). The law leaves it to the lenders to define in a private agreement which advertising counts as aggressive (KKG, Art. 36a).

For personal loans and consumer leasing, that agreement is a convention of 27 November 2015, in force since 1 January 2016. It was signed by the lenders in these businesses that are members of the association now called Konsumfinanzierung Schweiz, of the Swiss leasing association, and by other institutions. Its first principle is that consumers should not get the impression that consumer credits are available particularly fast and without a detailed credit check.

The convention names examples of what is not allowed:

• arguments that advertise particularly fast access to credit, such as «Expresskredite» (express credit), «Kreditprüfung innert 30 Minuten» (credit check within 30 minutes), «Sofortkredite» (instant credit), «sofort Bargeld» (cash now), or payout of the amount «innert 4 Stunden» (within 4 hours)
• wording that suggests a loan without a full credit check, or regardless of your income, such as «Sie bestimmen die Höhe Ihrer Monatsrate» (you decide your monthly payment) or a credit «unabhängig von Ihrem Einkommen» (regardless of your income)
• advertising aimed specifically at young adults under 25

In 2022, when a new industry agreement replaced one of the two existing ones, the Federal Council again saw no reason to define aggressive advertising in law itself (Federal Office of Justice).

One more rule applies to every advert for consumer credit: it must say that granting credit is prohibited if it leads to the consumer’s over-indebtedness (UCA, Art. 3 para. 1 let. n).

Why «instant» offers deserve care

• The checks still apply. Swiss Crime Prevention warns that dubious or even fraudulent firms offer loans despite open Betreibungen (debt collections) and without any credit check. For a consumer credit, the law makes every lender that lends as a business check that you can afford it before it lends (KKG Art. 28).
• A fee before the money is a warning sign. Swiss Crime Prevention describes advance fee fraud as any scam in which you pay something up front to receive money, a product or a service. After you pay, the fraudsters disappear.
• A broker can’t charge you. You owe a credit broker nothing for arranging a consumer credit (KKG, Art. 35).
• Speed can hide the cost. The figure to compare is the total you repay, at the same amount and term. The guide to rates and costs explains each part of the price, and the maximum interest rate shows the legal cap.

The guides to loans «without a credit check» and spotting loan scams go into each warning sign.

What makes a loan faster, honestly

You can shorten an application yourself:

• Have your ID or passport, and your residence permit if you have one, at hand.
• Know your own records: your IKO and ZEK extracts and your debt collection extract. See ZEK and IKO explained.
• Give your real income and costs, so the lender has no reason to doubt them.
• Answer the lender’s questions quickly.

How long it takes at Swizeo

We don’t promise an instant decision or an instant payout. Here is what happens, in order:

1. You apply online, on the application page, in six steps. Each step is saved as you go.
2. The credit check. With your consent, we check with the credit offices we name and whether the payment fits your budget.
3. The decision.
4. Your offer and the contract. You see your rate and your total cost, then sign online.
5. The withdrawal period.
6. Payout.

The guide how to apply goes through each step.

If you need money urgently because a bill is overdue, a loan may not be the fastest help. Talk to the creditor, and see debt help in Switzerland for free advice.

Next step

See the monthly payment and the total cost for your amount in the loan calculator, before you answer any offer. It needs no name or ID.