Replacing an existing loan in Switzerland

To replace a loan (in German Kredit ablösen, in French rachat de crédit), you take out a new loan and use it to pay off what you still owe on the old one. In Switzerland you may pay back a consumer credit before its term ends, and you then owe no interest for the time you no longer use it (KKG Art. 17). So you are free to switch. Switching saves money only if the new loan costs less in total than what you would still pay on the old one, and a lower rate is not enough on its own: a longer term can cancel the saving. The new lender must check your budget again, as for any new credit, and count the credits you still owe (KKG Art. 28). If the payments are already hard to make, talk to a non-profit debt advice service before you take on a new loan.

Replacing one loan, or combining several

This guide is about replacing one loan with another, from your current lender or from a new one. If you want one new loan to pay off several credits, such as a loan, a card balance and a leasing contract, read refinancing and consolidating.

Replacing a loan and borrowing more at the same time is called topping up (in German aufstocken). It has its own risks, set out below.

When replacing a loan can save money

• The new loan has a lower effective annual rate. The effective annual rate expresses the whole cost of a credit, interest and other costs, as a yearly percentage of the amount (KKG Art. 5 and 6). Compare this rate, not the interest rate alone.
• Your loan was signed when the legal maximum was higher. A contract keeps the maximum that applied when it was signed (VKKG Art. 9a). For cash loans, the maximum was 12 % in 2024 and 11 % in 2025, and it has been 10 % since 1 January 2026 (Federal Office of Justice, notices of 21 November 2024 and 31 October 2025). So a loan signed in 2024 or 2025 may cost more than any new cash loan is allowed to cost today.

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

A longer term can cancel the saving

Here is an example with made-up figures, worked out the way our loan calculator works. A year ago you borrowed CHF 15’000 over 48 months at an effective annual rate of 11 %, and you pay CHF 383.92 a month. After 12 payments you still owe CHF 11’815.06, and the 36 payments left add up to CHF 13’820.87. A new lender offers you 8 % for the amount you still owe.

Over the time left on the old loan, the lower rate saves CHF 546.87. Spread over 60 months, the payment falls by CHF 145.93 a month, but you pay CHF 458.62 more in total than if you had kept the old loan. The example assumes the old loan is paid off on a payment date, with nothing to pay for ending it early.

What switching costs

• Paying off the old loan. For a consumer credit, you have a right to have the interest for the time after you pay it off waived, and the other costs for that time must be fairly reduced (KKG Art. 17). Ask your lender, in writing, for the exact amount that settles the loan on a given date.
• Leasing is different. You can end a leasing contract with at least 30 days’ notice, to the end of a three-month leasing period, and the leasing company’s claim to compensation follows the table in your contract (KKG Art. 17). See car loan or leasing.
• Two loans for a while. Until the old loan is paid off, it keeps running. If the new lender pays out only after the withdrawal period, as Swizeo does, you keep paying the old instalments until then.
• More months of interest. A new loan over a longer term costs more in total, as the example shows.

What the new lender must check

A loan that replaces another is a new consumer credit, so the full check applies.

• Before the contract, the lender must check that you can afford the credit (KKG Art. 27a). It must ask the IKO, the information office for consumer credit, about you. The IKO says this duty applies again when a consumer credit is renewed or replaced.
• The test. You must be able to repay without using the part of your income that can’t be seized in debt collection. The lender counts your actual rent, your taxes according to the withholding tax table and the commitments reported to the IKO (KKG Art. 28).
• 36 months. The lender must assume the new credit is repaid within 36 months, even if your term is longer. The same applies to earlier consumer credits you have not yet repaid (KKG Art. 28).
• Documents. The lender may ask for an extract from the debt collection register and a salary statement, or other documents that show your income if you are not employed (KKG Art. 31).

The 36-month rule matters when you switch. A longer term lowers your payment, but the check still assumes 36 months, so a longer term alone does not make a larger amount affordable. Ask the new lender how it counts the loan it would replace.

Applying leaves a trace. Members of the ZEK, the central office for credit information, report credit applications as well as the contracts that follow, and they must tell you and ask for your consent first. An application that is turned down stays on record for 2 years, unless it was turned down for a reason that is not about you (ZEK). Apply where you mean to borrow, not to many lenders at once.

Topping up: borrowing more when you switch

Topping up means the new loan pays off the old one and adds money on top. Your debt grows, and the interest with it. The lender checks the whole new amount under the same rules (KKG Art. 28).

Caritas debt advice describes a pattern it calls a Kettenkredit (chain credit): each new loan buys back the last one and adds an extra amount, and each one needs a new thorough check of your budget. From its experience, Caritas says a credit should only be taken out after careful thought, and never to bridge a financial shortfall.

The Act covers credits up to CHF 80’000 (KKG Art. 7). If a top-up takes you above that amount, ask the lender which rules apply.

Switching step by step

1. Get the settlement figure. Ask your current lender, in writing, for the amount that pays off the loan on a given date, and how long the figure is valid.
2. Compare the totals. Add up the payments left on your current loan. Set them against the total to repay on a new loan for the settlement amount. The loan calculator shows the total for any amount and term, and how to compare loans explains each figure in an offer.
3. Apply to one lender. Your application is reported to the ZEK if the lender is a member.
4. Read the new contract. Among other points, it must state the net amount, the effective annual rate, the repayment plan, your right to repay early and your right to withdraw (KKG Art. 9). You have 14 days to withdraw in writing after you receive your copy (KKG Art. 16).
5. Agree who pays the old lender, and when. Ask whether the new lender pays the old one directly or pays the money to you, and get the answer in writing.
6. Keep paying the old loan until it is settled. If unpaid instalments reach 10 % of the net amount, the old lender may end the contract, and it must report the arrears to the IKO (KKG Art. 18 and 25).
7. Get proof that it is closed. Ask the old lender for written confirmation that the loan is settled.

Once the old lender deregisters the contract, the IKO deletes it at the latest 14 days later. At the ZEK, an ended contract stays for 3 years from the date of its rating, or 5 years if it was rated as a partial or total loss or with legal uncertainties (IKO, ZEK). You can order your own extract from each office, free of charge, by post. See ZEK and IKO explained.

When a new loan is not the answer

If you want to replace your loan because the payments no longer fit your budget, a longer term lowers the payment and raises the total. It can push the problem further out without solving it. Take that as a reason to get advice first if:

• you are already behind on payments
• you have open Betreibungen (debt collection proceedings) or reminders from several creditors
• you pay one credit with another, or everyday costs with a card
• the numbers only work with a top-up

Non-profit debt advice services help people at risk of debt and people who are already over-indebted. Schuldenberatung Schweiz, the umbrella organisation of these services, lists them by canton and runs a free hotline on 0800 708 708, Monday to Thursday from 10:00 to 13:00 (schulden.ch). Our guide debt help in Switzerland explains the options. If several lenders have already turned you down, read loan rejected: what now before you apply again.

Questions to ask before you switch

• What is the settlement figure of my current loan, and until when is it valid?
• What would I still pay in total if I kept it?
• What are the new loan’s effective annual rate and total to repay?
• Is the new term longer than the time left on my current loan? What does that add to the total?
• Am I borrowing more than I need to pay off the old loan? Why?
• Who pays the old lender, and when: before or after the new loan’s withdrawal period?
• If it is a leasing contract, what does ending it early cost?

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.

Replacing a loan at Swizeo

If your current loan is with Swizeo, you can pay it back early at any time, in full or in part, with interest only up to the day you repay.

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.
• We pay the money out after the withdrawal period.

Next step

Ask your current lender for its settlement figure. Then put that amount and the months left on your loan into the loan calculator, and compare its total to repay with what you would still pay if you kept the old loan.