Personal loan leads into the debt trap

The calculation is simple: the current income is not enough to pay rent, bills, health insurance premiums and then also the taxes. A small loan should be the salvation and first of all allows the payment of all outstanding liabilities. But the regular income is no longer and the previous liabilities usually arise again. After all, these are mostly payments that have to be made continuously at certain intervals. In addition, there are now the repayment installments for the personal loan, which can sometimes start with a repayment-free period, but the interest payments are still due during this period. The result: The person concerned goes into debt even more and gets deeper and deeper into the debt trap, from which he can often no longer free himself. Debt counseling often only leads to the conclusion that personal bankruptcy is inevitable.

Look for alternatives to personal loans

Before going to the bank or credit broker, alternatives should first be considered. One possibility is to arrange a deferral of the payment with the payment partner. The payment term can possibly be pushed back so that the liabilities can be processed according to their prioritization. This also applies to the tax office, which can receive a justified request for payment in installments. If there are already debts, it is possible that the tax office will not approve a deferral. It is therefore important to act in good time and to submit a corresponding application as soon as the first impending debt arises.

Mail order companies or local sellers should also be asked to postpone payments. Often a payment-free period can be agreed or a supplier credit is taken out. Interest may then have to be paid on the invoice amount, but this is usually lower than interest at the bank when a personal loan has to be taken out.

Foundations also help in some cases. One example is Educa Swiss, a foundation that helps students in need. It grants loans to students, whereby particularly favorable conditions can be agreed. Crowddonating platforms may also come into question, although these will hardly be the right place to go if it's just a matter of paying a few bills. However, if your own education or that of your children is at stake, if your studies can no longer be financed, or if you are threatened with being kicked out of your home, such foundations can be your last resort.

Conclusion: choose personal loans only as an emergency solution

Those who get into financial hardship usually only have to bridge a certain period of scarcity. In addition, it is rarely about large sums, usually only a few hundred to thousand francs are needed to pay current bills, tax debts or health insurance premiums. A personal loan is then the worst possible solution, because it usually ensures the accumulation of an even larger mountain of debt. The bad conditions that are given on small amounts are to blame. The interest rates are high and cannot be compared with the interest rates that are common on a home loan, for example. In the end, the debtor is faced with a mountain of debts and needs a new solution, which often enough is personal bankruptcy. If you want to avoid this, you should definitely seek deferrals, deferred payments and possible subsidies from third parties.