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Personal loan and taxes: The most important things at a glance

Personal loan and taxes: The most important things at a glance

Personal loan and taxes: The most important things at a glance

Deducting taxes is common for companies, and they can reduce this profit. But what about the personal loan? The deduction of interest on debt is very possible in the context of the tax return.

Personal loan and taxes: The most important things at a glance

Deduct interest on debt from tax?

The debt interest paid over the year can be deducted from taxable income by private individuals. This applies to both cantonal income tax and federal tax, with an allowance of 50,000 Swiss francs. The interest may be deducted from the private assets up to the amount of the gross income. This regulation also relates to the interest on debt that accrues from a personal loan or is payable for it. The allowance is usually sufficient to fully deduct the interest.

The deduction of debt interest is actually worth it! If, for example, a personal loan of CHF 30,000 was taken out, which runs for 36 months, the interest can add up to around CHF 2,000 in the first year. If the tax rate is ten percent, tax savings of CHF 200 may be possible.

What can be claimed?

As a borrower, you not only transfer the interest to the lender's account, but also the repayment rate plus the interest. The interest on the debt is deductible, but the portion of the repayment is not. This means that you can only apply part of the interest on your tax return and nothing beyond that. This reduces the deductible portion each year because interest is always calculated on the remaining loan amount. However, the repayment share increases. If you compare the possible deductible amounts shortly before the end of the loan repayment and at the start of the repayment, you will also see considerable differences in the amount of the deduction amounts.

Interest is deducted as follows:

    • In January you will receive a certificate from the lender of the amount of the interest payments made.
    • You enter the details of the deductible interest on the debt and the outstanding debt in the corresponding form for the? Private debt? on.
    • You transfer the sum of all debt interest from personal loans into the main form.
    • You attach a copy of the individual certificates of interest to the tax return.

If you do not automatically receive a certificate of the interest you have paid, you can also request it directly from the lender.

Deductible also for private loans

If a personal loan is used by relatives or friends, interest can of course also be agreed on the loan amount. These are deductible, although the deductibility even applies to other forms of credit (for example, debts from credit card payments). Important: You must not claim leasing transactions for tax purposes, because leasing is legally seen as a rent and not as a loan. If you are planning a new purchase like a car, you should therefore use the loan as a financing option as a lease.

Tip: Include copies of the private loan agreement and receipts from the bank on the payments made, as you will not receive a current interest certificate for private loans.

As a summary, it can be stated

Debt interest on private loans is deductible and can reduce taxes.
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Personal loan: How to recognize dubious credit providers

Personal loan: How to recognize dubious credit providers

Recognizing fraud: This is how loan sharks pull the money out of customers' pockets

Unfortunately, dubious credit providers are all too common. But a few points indicate that you are dealing with a provider who wants to pull the money out of your pocket with the loan granted.

Personal loan: How to recognize dubious credit providers

Not a member of the Central Credit Information Office

The consumer credit information office (IKO) records the consumer loans granted in Switzerland, and since April 2019 so-called peer-to-peer loans have also been covered by the consumer credit law and must be managed accordingly. Reputable providers are members of the central office for credit information, where all loans are recorded. If a person makes a new loan application, a credit check is carried out, for which it is important to have a look at the ZEK lists. If a bank violates this rule, this can have legal consequences. If you want to grant loans without a credit check, you are not serious.

Get a loan despite debt enforcement

Untrustworthy providers do not keep the borrowers in mind. Therefore, you also advertise Credit despite debt enforcement and thus target people who are in financial need. A reputable provider will always want to avoid over-indebtedness of the borrowers and always checks the applicants' creditworthiness. It applies to both current and completed debt enforcement that they can represent an exclusion criterion. The creditworthiness is always negatively influenced. Anyone who claims otherwise as a credit provider is not serious!

The fee trap

The law stipulates that all fees associated with lending must be included in the APR. However, the consumer credit law stipulates that fees for reminders, prepayment fees or costs for address research may be passed on to the borrower. Not more! Only dubious providers charge additional fees.

The instant credit trap

An instant loan is supposed to provide quick help in financial emergencies. But that is not allowed! Offers for instant or urgent loans almost always come from dubious providers, especially since the term? Instant loan? must not be used. The consumer credit law requires a waiting period of 14 days before a loan can be paid out. Instant loans, on the other hand, advertise with the payment within a few minutes. Exceptions only apply to loans that are not covered by the consumer credit law (for example, for amounts higher than 80,000 Swiss francs or for a shorter term than three months).

Debt restructuring as a point of contact

Debtors are advisors and not credit institutions or financial service providers, although there are of course serious providers among them. A financial restructuring does not mean a loan, but only the processing of debts. The money for this is paid to the company in question, which works for a fee.

In summary: How to recognize our loan providers

The following list summarizes the most important tips:

    • Check the warning list of the Swiss Financial Market Authority for the name of the provider.
    • Check to see if it is a loan provider at all and not just a debt redeveloper.
    • Check the advertising for its terms (instant credit, short-term payment, etc.) and pay attention to the language choice of the provider.
    • Check the offer for hidden fees.
    • Go to debt counseling instead of credit intermediary if you are in financial difficulties.
    • Check whether the provider is a ZEK member.
    • Check where the company is based. Don't just look for the abbreviation? Ch? in the web address, because it can still be a mailbox company.

Are you looking for a reputable personal loan? You can choose the personal loan you want in Search credit comparison and always rely on reputable providers!

Source: comparis.ch

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Untrustworthy loan providers: the trick with the instant loan

Dubious loan providers

Instant Loans: Questionable Solution to Financial Problems

An instant loan sounds tempting: it is issued within a very short time and therefore also bears the nickname? Express loan ?. However, there is a mesh behind the promised rush loans, which have not been allowed to be advertised in Switzerland since 2016.

Dubious loan providers

Criticism of the instant loan

The promotion of instant loans promised a lot, the reality could hold little. According to the credit industry's self-regulation agreement, the advertisement associated with such a loan offer that the loan would be granted very quickly but without a detailed examination of the applicant's creditworthiness. The advertising was classified as misleading. On top of that, a normal consumer loan is loud Consumer Credit Act must be between 500 and 80,000 Swiss francs, it must also be issued by credit institutions or financial service providers and have a term of at least three months.

In Switzerland, however, instant loans always turn out to be tempting offers that banks only want to use to catch customers. The providers are often companies with dubious focus, they are not checked or licensed. In addition, it was very often advertised with an instant loan, although it could not really be granted.

Recognize dubious offers

Providers of instant loans often sound full-bodied that they could grant a loan within a few minutes. But there are a few points where you can tell whether it is a serious offer or not:

    • Pay attention to terminology: instant or instant loans are always dubious
    • To promise that the money will be in the account after a few minutes
    • strikingly bad language, spelling and grammatical errors in the offers
    • Address outside Switzerland or not given at all
    • missing references to debt advice or central office for credit information
    • ?Error? in your own advertising: warning of dubious providers (but these providers are managed themselves on the sites mentioned) or notice that no loans are being granted, but other sites are promoting an instant loan

Advance loan applications possible

Of course, processing loan applications can also be particularly quick. All professional service providers have the option of preferring credit checks, making the processing of applications much faster. The applicant himself can also help to speed up the processing of his application. For example, it is possible to submit the necessary documents with the application so that no additional requests are necessary. The banks themselves decide on the duration of the processing and, if the applicant has given a positive check, can pay out the requested money immediately after a waiting period.

It doesn't have to be an instant loan

An instant loan with all its (empty) promises certainly sounds tempting, but it's not legal. In Switzerland, however, you will still receive a consumer loan within 14 days. With certified providers, you can be sure that everything is going well and that the agreed conditions are actually being met. In addition, you can exercise your 14-day right of withdrawal for a regular loan and, together with the waiting period, you have enough opportunity to rethink any major purchases that you have suddenly considered.

Conclusion

Never prematurely close an apparently lucrative loan offer, because an instant loan is illegal in any case! There are many other alternatives that are much more sensible and, above all, legally secure. Now the offer for credit comparison use and save money!

Source: comparis.ch

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