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
