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Over-indebted over half a million people in Switzerland

overindebted in Switzerland

Loans as standard: borrowing is becoming normal in Switzerland

There is currently a new record high in terms of the indebtedness of Swiss citizens. It is striking that the debt increases from year to year and has now assumed a rate of 6.5 percent. For many Swiss people, taking out a loan and thus taking on a debt burden has become normal.

overindebted in Switzerland

Men have higher debts

Western Switzerland in particular is showing a particularly high number of over-indebtedness, because the ratios here are around 10 percent. There are also differences between the sexes: Men are over-indebted much more often than women:

    • Men between 46 and 50 years: Overindebtedness rate of 12 percent
    • Women between 46 and 50: Overindebtedness rate 8 percent
    • Women aged 40 and over: Debt ratio continues to fall
    • Men between 40 and 60: debt ratio remains consistently high

Men between the ages of 36 and 40 have the highest debt ratio in Switzerland, whereas women between 26 and 30 are most indebted. This leads to the conclusion that women are more concerned about financial security and rarely take an investment risk. However, this does not apply to women between the ages of 18 and 25, in this age group they are as likely to be in debt as men.

The credit rating suffers

Many Swiss are not aware that creditworthiness suffers from over-indebtedness. They get a negative credit report and often don't know why. The reason for this is, however, simply explained: every loan application is entered in the central register for credit information. Here you will also find information if loans have not been paid on time, if interest on arrears has accrued or if seizures and debt collection have been carried out. This is very difficult for a new loan application. By the way, bad creditworthiness not only has a negative effect on the application for a new loan, but also when applying for a credit card.

A bad credit rating is even noticeable in everyday life: For example, if you want to buy on account when shopping online, you have to go through a credit check. If this is negative, payment by invoice is no longer available.

In summary: Overindebtedness is increasing

More and more men and women in Switzerland are over-indebted, although it can be seen that it is mainly men who fall into the debt trap and find it difficult or impossible to get out of it. They are generally more willing to take risks when it comes to investments, although women are more concerned with financial security. It is also noticeable that women over the age of 40 are less and less in debt, while the corresponding rates for men remain stable.

Here you can see the offers for loan comparison, you should be interested in one. Find out more about the conditions and compare offers from different banks before you decide on an offer or commit to it.

Source: comparis.ch

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Women need loans from need, men for cars

Women need loans from need, men for cars

Loans for essential expenses or luxury purchases: do borrowers all tick the same

Women turn to the bank less often because they need a consumer loan. However, when the time comes, they usually need the loan out of necessity, for example because a divorce or death of the partner has created a financial emergency for them. Men, on the other hand, most often buy a new car from a personal loan.

Women need loans from need, men for cars

Women hold back

Women tend to be reluctant to borrow: only around a third of them apply for a loan, as evaluations have shown such applications. Most women act out of necessity and not to fulfill a specific desire to consume. Men act differently on this point and are more likely to buy consumer goods. At the same time, women are almost twice as likely to apply for credit because of financial constraints.

Open bills and arrears in particular are the reasons for borrowing by women, although it is striking that they are particularly often affected by debts at retirement age. At the same time, they have more difficulties repaying a loan than men and often apply for a loan in order to be able to repay existing debts. However, they tend to forego the purchase of pure consumer goods and everyday items.

Various reasons for borrowing

The reasons for paying bills by credit are not excessive consumption, but rather the fact that women's income is generally lower. They are more likely to work part-time and have a lower income from having a baby. In the event of divorce or death of the partner, a large part of the household income is lost, so that a financial bottleneck arises more quickly

Men, on the other hand, apply for a loan rather for luxury reasons and want to use it to finance their dream car. Men under the age of 25 in particular act in this way. In addition, they pay off investments more often via a loan and buy bitcoins or securities, for example. From a financial point of view, they are often more willing to take risks than women and are more likely to accept the high risk of losing invested money.
These differences between men and women are also striking:

    • Women are more likely to finance training through credit
    • Men borrow larger amounts
    • Men are with the Application for credit older (most often between 30 and 34 years, for women the average is between 25 and 29 years)

all in all it can be said

Men tend to treat themselves to luxury goods and new cars with borrowed money, and they also tend to invest the money from the bank in riskier investment products such as bitcoins. Women, on the other hand, use loans more often to settle outstanding bills or to redistribute debt. In addition, women are more likely to put money into their own further training, which is less common for men with a loan.

If you are also interested in a loan, you should check out the various personal loan offers with one before concluding a contract Check credit comparison. Only then can you be sure that you are taking advantage of a good offer that also meets the conditions on offer.

Source: comparis.ch

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10 tips on how to avoid over-indebtedness

10 tips on how to avoid over-indebtedness

10 tips on how to avoid over-indebtedness

Over-indebtedness is the order of the day: Around 1.3 million Swiss are now over-indebted and threatened with attachments and debt enforcement or even private bankruptcy. Protect yourself from this with the following ten tips:

10 tips on how to avoid over-indebtedness

1. Keep an eye on your budget

It can quickly happen that expenses exceed revenue. Anyone who supplements fixed monthly costs with special expenses and then takes out a loan can quickly go into debt trap. Usually it is the small expenses like membership fees or subscriptions that are forgotten and increase the expenses unexpectedly.

2. Think realistically when borrowing

If you want to take out a loan, you should consider the future rising cost of living. Never plan too tightly, but always leave a buffer for expenses that you may have to face.

3. Note the credit card limit

Do not overdraw your credit card, as the default interest is often even higher than for a overdrafted current account. Have the credit card balance cleared at the end of the month. With longer intervals, credit card holders often lose track.

4. Pay in cash

Pay in cash whenever you can. The reason: you keep a better eye on your expenses, even with large amounts. The debits from the account or credit card are not directly visible and are often an unpleasant surprise at the end of the month.

5. Save money

If you have money left in a month, don't just spend it. Make provisions for unforeseen purchases or sudden additional expenses due to defective household appliances. You can also set up a separate account and deposit a fixed amount there every month.

6. Do not use loans for short-lived goods and products

If you take out a loan, please use it to finance only long-term purchases. The goods or products acquired with it should have a longer lifespan than you need to repay the loan. Don't finance vacation trips with a loan!

7. Do not choose too long terms

The longer a loan runs, the higher the interest rate. This means that the loan will become more expensive. If you only have a few euros available for repayment in a month, you better stay away from a loan and save yourself on the desired purchase.

8. Do not choose too short a runtime.

The opposite can also happen and the term of the loan is chosen too short. Then the monthly charge is very high, there is more of a risk of late payment. High default interest and an entry in the ZEK threaten.

9. Rethink spending

Some purchases do not have to be, even if they are tempting. It is better to forego some purchases and not be at risk of overindebtedness. Maybe you can buy the dream product a little later with your own saved money?

10. Seek debt advice

Do not be afraid to go to debt counseling. This can be found in 37 locations in Switzerland and helps you to balance your budget. This is often not possible on your own.

If you want to take out a loan, you should check the offered conditions carefully. Here you can get the personal loan in Check credit comparison and find the best offer for you!

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Beware on Instagram and Facebook: how to unmask credit fraudsters

Be careful on Instagram and Facebook

Beware on Instagram and Facebook: how to unmask credit fraudsters!

Social media play an increasing role in almost all areas of life. Unfortunately also for fraudsters who use this communication channel to spread their loan offers. Facebook in particular is the focus for them and becomes the scene of criminal activities.

Be careful on Instagram and Facebook

No real profiles and false promises

Low interest rates and long terms, which means a low monthly charge: Fraudsters like to advertise their loan offers, as the Swiss coordination office for combating cybercrime (KOBIK for short) knows.

Offers of this kind should make people aware of the fact that they simply cannot be real. The perfidious thing is that the crooks use the names of well-known banks or organizations so that there is no distrust. In some cases, contacts are even hacked and incorrect comments made in order to maintain the appearance of the trust they deserve.

If a user is interested in the offer, they are requested to provide personal data and a copy of their ID. Often there is also a fee that can amount to several hundred francs. The fraudsters are happy, the cheated never see their money again.

These tips will help you identify fraudsters

Very important: As soon as fees are charged, stay away from this offer! No special processing fees may be charged in Switzerland, these are already included in the loan interest. Also pay attention to these points to identify fraudsters:

    • They offer loans via Facebook, Instagram or Twitter.
    • Friends suddenly contact you with success stories on a loan.
    • The offers sound particularly tempting.
    • Many promises are made, for example that the creditworthiness would not be checked.
    • Personal data is requested directly or a copy of the passport.

Protect yourself from such fraudulent offers and be vigilant when looking for a loan. Report fake profiles directly and contact KOBIK. If you suspect that your own Facebook account has been hacked, contact Facebook and change your password immediately. In general, use a very secure password made up of combinations of numbers and letters, special characters, upper and lower case. 

Do not use obvious data or names as a password!
Very important: Never give out personal data to strangers. Especially not on Facebook, Instagram and Co., because no reputable bank offers credit offers here. At most, the bank itself is advertised; concrete offers that are tailored to one person are not made in this way by reputable providers.

Conclusion: Do not accept credit offers via social media!

The best precaution against fraudulent credit transactions is never to use Facebook and other social media to process them. There are no serious loan offers here, because they are not processed via social networks. Pay attention to fees that you should pay and personal data requested. Both are indications of attempted fraud.

If you are interested in a loan, contact branch banks or reputable online banks. With us you can get the offers for credit comparison and be sure that you haven't shortlisted any dubious providers.

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Personal Loan: The 7 Most Common Mistakes Of Loan Seekers

Dubious loan providers

Personal Loan: The 7 Most Common Mistakes Of Loan Seekers

The following seven mistakes are most common for loan seekers:

Dubious loan providers

1. Financial self-overestimation

Your own budget is often misjudged and no buffers are calculated. The monthly credit load is then too high and it is no longer possible to pay the credit installments. Default interest threatens, which makes the loan more expensive. In addition, an entry is made in the ZEK, which can be a hindrance to future financing projects. The best individual loan amount can be found in collaboration with an independent expert and consultant.

2. Fall for lure offers

Many credit providers want to attract new customers and offer so-called window prices. These seem very interesting at first glance, but then reveal themselves as an illusion. Actual interest rates drop significantly higher than advertised. The conditions will be adjusted accordingly, especially if the business will be rather risky for the bank itself. Not in favor of the borrower! In addition, everyone should be careful when it comes to instant loans. These may not be advertised at all, and lending within a few minutes and without a credit check is not legally permitted.

3. Do not make comparisons

A loan offer often appears tempting and comparisons with other providers are avoided. A mistake that can be dear to those concerned! The house bank does not always offer the best offer, even if you have been a customer there for many years. A loan comparison should not only include the amount of interest, but also the term, the amount of the loan and any additional agreements.

4. Select the wrong loan type

The personal loan is usually the loan of choice. It has the advantage that it can be used for many different types of financing. But if you already know exactly what the money is going to be used for, you can save a lot of money. Purpose-based financing can be much cheaper than a loan that is raised without a specific purpose. When you apply, you should therefore decide on the right type of loan or specify a corresponding purpose.

5. Measure the term too short

First of all, it sounds good: the term of the loan has been chosen to be very short, so debt is no longer an issue. At least theoretically, because in practice the credit installments have to be paid reliably, otherwise there is a risk of default interest and the ZEK entry. It is better to reserve a monthly buffer so that the usual payments and any special expenses are reliably covered. Therefore: It is better to choose a longer term and to be able to pay the loan installments reliably than to bet on a short repayment period!

6. Take out unnecessary insurance

Many advisors make credit loss insurance palatable to applicants. This is always there when the loan can no longer be paid due to an unforeseen event. What is often overlooked: Many default insurance companies set waiting times that prevent a payment default from being discovered in time. It therefore makes sense to check beforehand whether such insurance makes any sense at all.

7. Do not make any written agreements

If a loan is taken out within the family or among friends, the personal conditions often mean that the agreed terms are not written down. A mistake, as it turns out in the event of a dispute. It makes a lot more sense to rely on the written formulation of the most important key data on lending and repayment, even with a personal commitment, so that possible evidence in the event of a dispute becomes easier.

Before you take out a loan, you should check out the offers in View credit comparison.

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Personal loan: The 10 most important questions and answers for borrowers

Dubious loan providers

Personal loan: The 10 most important questions and answers for borrowers

The following questions and answers give a rough overview of the personal loan as well as current legal regulations:

Dubious loan providers

1. How much can my credit be?

Many loan applicants set the desired amount utopian. However, the lender may only grant the loan if the applicant's solvency is assessed in such a way that he is able to repay the loan within 36 months.

2. Can I apply for a loan without income?

You can apply for it, but it will not be granted. There is a minimum income of CHF 2,500, and you must be in a regular employment relationship. Providing guarantors is also not sufficient, but you cannot get a loan without your own income.

3. How high can the rates be?

The personal loan installments must be set at a level that takes account of monthly expenses and is set accordingly. They may not be chosen too high in favor of a shorter term because this increases the risk of late payment, which in turn would result in an entry in the ZEK and worsen your credit rating.

4.May fees be charged for a loan brokerage?

No. To protect consumers, the law does not allow fees for advisory and agency services. Any costs incurred are already included in the total interest costs, the interest must be calculated accordingly.

5.Can a loan contract be terminated prematurely?

You can redeem the personal loan at any time without giving a reason. Prepayment fees are not payable. You will receive a final invoice from the lender, interest will not be charged for the installments that are no longer payable. You only pay as much interest as has been accrued in the past.

6. How can you recognize reputable providers?

Each credit intermediary may only work if he has a license from his canton for his work. These licenses can be requested from the canton administration. Reputable providers also do not charge fees for their activities or make promises that the loan would be granted without a credit check. Will an? Instant loan? offered, it means to also keep your hands off it.

7. What if the credit is too high?

It may happen that the bank grants too much credit because it has insufficiently checked the applicant's creditworthiness. If it can be demonstrated that the provider has neglected his obligations, the credit contract can be declared void. As a customer, you are entitled to the entire loan amount including interest and costs. Important: The bank also calculates the attachable part of the income in the portability calculation!

8. What is the maximum interest rate currently?

The legislator has set the maximum interest rate to be charged at 10 percent. In part, installment loans are also available directly from the sellers for twelve percent. A personal loan, however, must not exceed 10 percent.

9. Do I have to sign a loan agreement?

If you have received an offer and this has resulted in a loan agreement, you do not have to sign it yet. You are not obliged to do so! Even after signing, you have a 14-day right of withdrawal, so loans are only paid on the 15th day after signing.

10. Help, my contract has formal errors! What now?

The legislator has specified exactly which points must be included in a loan agreement. For example, the annual interest rate or the reference to the right of withdrawal are important points. If these are not included, you as the customer have the right to the loan amount over the agreed term, but you do not have to pay any interest.

You are welcome to view the offers here in credit comparison use and discover more information on the subject of personal loans!

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I need money to finance my studies. How do I get a personal loan

Dubious loan providers

I need money to finance my studies. How do I get a personal loan?

Students often stand there with empty pockets because they concentrate on their studies and don't do a job on the side. If they earn the money through part-time jobs, their studies often drag on. A dilemma that seems to be solved with a personal loan. But can a student get a personal loan at all?

Dubious loan providers

No credit without income

If you don't have any income yourself, you might get the idea that someone could vouch for him. But this is not possible, because no reputable provider grants a loan to people who do not have their own income. This is also not possible with a guarantor! The personal loan stipulates that it must be repaid on its own, which is also the reason for the extensive checks by the bank prior to approval. As part of the credit check, your own income is carefully examined and included in the assessment.

With a personal loan, the following conditions regarding income are required:

    • the applicant is in an employment contract that has not been terminated
    • the minimum income is 2,500 Swiss francs a month
    • the minimum income required also depends on the amount of credit required

Pending or completed debt enforcement and the regularity of payments are also checked.

This is how the study financing can work

As a rule, students cannot get a loan. If you cannot fund your studies in any other way, you should therefore look for alternatives. This means that you may ask within the family, friends or acquaintances for a loan that can be designed according to your financial means. 

Important: Always keep any agreements in writing, because what's the name of it? ?Money ruins friendship!? This also applies within the family, where disputes have often arisen because the money lent has not been repaid. The most important conditions such as the amount of the loan, the repayment modalities and the time of repayment should be laid down in a contract signed by both parties.

However, there are other alternatives to traditional personal loans. A scholarship is eligible for significantly more students than is generally accepted. A student loan is also often possible, although no specific statements can be made about the modalities here. These depend on the canton in which you study and on the institution itself. The conditions differ in this regard. However, the university is a good contact for financing your studies and usually offers its own advisory services.

Crowdlending may be an option for private investors, and donations can also be collected on various platforms. However, the course must then really be worthy of support. apply and be described accordingly!

Conclusion on personal loans for students

At this point you have the option of a personal loan through a Credit comparison avail to take. But a personal loan will not work for students as long as they do not have their own income. In addition to an impeccable credit rating, this is the most important prerequisite for such a loan to be granted at all, and the minimum income must be 2,500 Swiss francs, which for most students should be far from reality.

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My loan application was rejected. I am now blocked for further loan applications

My loan application was rejected

My loan application was rejected. Am I now blocked for further loan applications?

Even if your own considerations were so extensive, it can still happen that the loan application is rejected. This results in poor creditworthiness. But are you automatically blocked for further loan applications and will you never be able to get a conventional loan again?

My loan application was rejected

Collection of data at ZEK

It is correct that the data is recorded at the central office for credit information. This means that not only has the presence of a loan application been registered, but it has also been noted whether the loan was rejected or approved.

Payment arrears for bills, other loans or debt collection can also be found there, giving a comprehensive overview of a person's creditworthiness. The data are not all saved for the same duration. If the loan application was rejected, the corresponding entry remains in the database for two years.

What happens when I apply for a new loan?

It is open to everyone to apply for a new loan even after one has already been rejected. The entries in the ZEK are now decisive for whether the application is approved or rejected or whether the conditions are adjusted accordingly. Depending on the reason for the rejection and the type of risk awareness of the bank concerned, the further course of action is different.

If a loan application was rejected because credit card debt enforcement or dunning procedures were already pending, the loan application is usually not approved. If the first loan application was rejected because of less difficult matters, it may well be that the new application is approved.
In principle, however, any entry in the ZEK can have the following effects, among others:

    • bad credit rating
    • the possible rejection of the loan application
    • if the application is approved, a higher interest rate
    • Limitation to a lower loan amount possible if approved

It is therefore important to always make a realistic loan application and to know your own credit rating or to assess it correctly. This will avoid disappointment after the application has been made, and will also prevent you from receiving another entry in the register, which can also have a negative impact on all financial projects for the next two years.

It can be helpful not to send a loan request directly to the bank, but rather to first commission an independent advisor to do so. He can assess the creditworthiness and weigh up various options for the further procedure.

After the rejection, you should contact the ZEK and obtain a free self-assessment. This means that in future you will know which entries are available about you and what has led to the loan application being rejected. Please never switch to providers who allegedly grant loans without a credit check, here you fall into the trap of fraudsters!

In summary: After the rejection, not everything is lost

Before applying for a loan, find out about your creditworthiness in order to know which entries are available. If a loan application is rejected, it depends on the respective reasons whether another application can be successful. The entries in the ZEK for rejected loan applications remain for two years.

Would you like to compare the conditions for the personal loan in advance? Here, in ours loan comparison you have the opportunity to do so!

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Personal loan: Every third Swiss already had a personal loan

Personal loans

Financing Fast Spending: Personal Loans As A Way To The Debt Trap?

A personal loan should help to bridge a financial bottleneck and is quite manageable with a maximum repayment period of 36 months. He has a bad reputation, according to many Swiss people, that the personal loan would lead directly into the debt trap. Nevertheless, many Swiss have already taken out such a loan.

Personal loans

Help or trap?

Surveys in 2017 had shown that every third Swiss had already taken out a personal loan. Nonetheless, two thirds of the Swiss believe that taking out a personal loan is the first step towards a debt trap and only leads to thoughtless consumption. In addition, many banks are assumed to simply rip off the borrowers and not to provide real help in a financial emergency.

Bridging a financial bottleneck is at the forefront of personal loans. For example, if a new car is to be bought, many Swiss people use a personal loan. At least around 50 percent said in surveys that they had already financed a vehicle with a personal loan. 

However, one in five also stated that they had used a personal loan to settle debts or open bills. Here the fear of the debt trap may certainly be real, because if other debts are paid off when the debt is raised, a worst-case scenario can lead to a vicious cycle that has only one end: total over-indebtedness.

However, anyone who takes out a personal loan, for example to finance the purchase of new furniture or a new vehicle, does not restrict their own reserves or the monthly financial scope by purchasing these goods too much and can still fulfill a wish.

This is what my borrower thinks about personal loans

People who have already taken out a personal loan are generally more open and positive about this financing option than people who only know the loan in theory. You have fulfilled a wish, repaid the loan and everything is fine. They believe that personal loans are a real help. Every second person who had already taken out and repaid a loan stated in the survey that they were using a personal loan again.
Personal loans are most commonly used to finance the following goods and products:

    • Initial and continuing education
    • vehicle financing
    • Furniture
    • Purchase of electronic devices
    • Travel and vacation

However, it also shows that personal credit is rarely used for the latter three points. Furniture and electronic devices in particular are often financed directly by the dealer through installment payments. It is also noticeable that it is mainly men who take out a loan to finance certain wishes, women tend to use the savings or plan more long-term and save on large purchases.

Conclusion: Personal loans are suitable for financing large purchases

Even if popular opinion says that a personal loan would quickly lead to a debt trap, borrowers don't see it that way. Of these, one in two would take out a personal loan again, because the experience with it is so positive. 

A personal loan does not automatically lead to debt, so it is a good way to bridge a financial bottleneck. 

It is important that you have the personal loan in advance Check credit comparison, because the offers for this vary depending on the bank.

Source: comparis.ch

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Personal loan: choose the right loan term

Consumer Credit Act

Personal loan: choose the right loan term

In most cases, anyone interested in a loan assumes that the term should be as short as possible. It is assumed that this could save costs because the interest would be calculated for a shorter term. However, there are cases in which a short term is even a problem.

Consumer Credit Act

Save by repayment

The popular opinion about loans and optimal terms can easily be summarized: The shorter the term, the cheaper the loan has to be. But that's a mistake! At least in some cases, a runtime that is too short can be problematic rather than helpful. But: If you tend to have a longer repayment period when concluding the loan contract, you can still redeem your loan earlier. 

The interest that would have accrued for the remaining term then expires. The consumer credit law stipulates that it must be possible to repay the loan before it expires, but this procedure must not make the loan more expensive. The outstanding loan interest that would have accrued for the entire term then expires. The point is that lawmakers want to ensure that borrowers don't face any obstacles if they want to pay off their debts earlier.

Paid too late? Beware of default interest!

When applying for a loan, it is checked whether the applicant will be able to repay his loan within 36 months. This is intended to provide some protection against over-indebtedness. Important: The term of the loan should always be calculated so that it can be repaid without any problems. For this purpose, a budget is drawn up that includes all income and expenses as well as a buffer. Two variants are possible:

    • The term is chosen longer than necessary
      In the course of repaying the loan, the borrower notices that he has additional financial resources or that his monthly financial scope is greater than expected. He can redeem the loan prematurely, the interest that is still due for the payment months that are now no longer applicable.
    • The term is too short
      There is sometimes a problem here: the borrower cannot meet his payment obligations. With a short loan term, the monthly burden of principal and interest payments increases. If these cannot be mastered, there will be delays in payment and thus due interest will be due.

Default interest makes a loan more expensive and is also registered with the central office for credit information. In turn, the creditworthiness of the person concerned deteriorates sustainably and future borrowing can also be problematic or very expensive.

In summary: good planning of the loan term is important

Please plan a sufficiently large buffer in addition to the regular expenses when planning the possible loan. What if the car breaks down or needs renovation? Such expenses are often forgotten in the monthly planning. In any case, prevent default interest from being incurred; in agreement with the lending bank, the loan agreement may be changed again and the term may be extended. However, this also carries the risk of a higher interest rate.

Here you can see the offers for a personal loan in loan comparison use and find out if this loan option suits you!

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