Getting a Loan in Switzerland: Criteria

The cost of getting a loan in Switzerland varies widely between lenders and individual loan offers. That’s why comparing loans is crucial to getting the best deal.

But comparing interest rates is just the first step. Applying and getting approved for a loan is more difficult. Lenders each use their own criteria to determine whether or not you are eligible for a loan.

The most affordable loans in Switzerland (most of these are online loans) typically have the strictest eligibility criteria. Unless you have excellent creditworthiness, the chances of your getting the lowest interest rates are poor.

The poorer your creditworthiness, the more you can expect to pay for loans. The rule of thumb is: The higher the maximum advertised interest rate of a loan offer, the higher the chance of your being approved for the loan. When looking for a loan, your priority should be finding the lowest interest rate for loans that match your creditworthiness.

The most important criteria for getting a loan

Swiss lenders have a fairly long list of criteria that you will have to meet in order to show that you are good for the money. If you don’t meet these criteria, you will not be approved for a loan.

The interactive loan comparison on moneyland.ch is the only tool in Switzerland that lets you find loans for which you may be eligible based on their criteria for approval. Only loan offers which match your situation appear in comparison results.

These are the main criteria used by lenders:

• Age: You have to be at least 18-years-old to be approved for a loan. Many lenders also have a maximum age limit for borrowers.
• Country of residence: As a rule, Swiss lenders only provide loans to applicants who live in Switzerland. Some lenders also accept applicants who are residents of Liechtenstein.
• Canton of residence: Some cantonal Banks require that you live (or work) in the canton which they service.
• Residence permit: If you are not a Swiss citizen, your eligibility for a loan will depend on the type of residence permit you hold. Permanent residents (class C permit) are generally eligible. Loan applications from residents with a class B permit may not always be accepted, or additional criteria may be required. Only a handful of lenders provide loans to cross-border workers (class G permit).
• Bank account: Some banks only give loans to their account holders.
• Loan amount: Each lender has its own minimum loan size and maximum loan size criteria.
• Loan terms: Each lender has its own limits on minimum and maximum loan terms. Depending on what loan term you need, you will have more or less loan offers to choose from.
• Reason for getting a loan: Some lenders limit the purposes for which loans can be used. For example, certain lenders may only accept applications for loans which will be used to finance a car or a home, or use lower interest rates for these loans.
• Employment status: You will have to prove that you are employed on an unlimited and ongoing basis. As a rule, you should not apply for a loan during a probationary employment period. You will have to include at least 3 salary slips in your application. Some loan offers are also available to self-employed individuals, and some are accessible for employees with temporary employment contracts.
• Type of loan: Some offers only apply to new loans and not to loan refinancing.
• Minimum income: Many loan offers have minimum income requirements. The moneyland.ch personal loan comparison only shows loans for which you are eligible.
• Open debt collection cases: If you have an open debt collection case, you will automatically be a persona-non-grata at Swiss lenders.
• ZEK credit record: Having a negative entry in your ZEK credit record will nix your chances of being approved for a loan in Switzerland. You can check your ZEK credit history by requesting a statement on the ZEK website.

Approval is based on all criteria

In addition to the basic criteria listed above, each lender has its own list of eligibility criteria for borrowers. Factors which might not disqualify you from getting a loan on their own may disqualify you when combined with other factors. A lot depends on the lender and the type of loan you need.

Your ratio of expenses in relation to your income will have a decisive impact on whether your application will be approved or denied. If your average expenses are high in relation to your income, your loan application most likely will not be approved. The reason for this is that if your expenses are high in relation to your income, unexpected expenses can easily result in your being unable to meet your loan repayments.

There are other factors which can affect lenders' decisions to approve or deny loan applications when combined with other factors. These include: Your marital status; whether you have children, the number of children you have and the ages of your children; your annual net income; your monthly home rental or mortgage payments; your housing situation; your employer (and further information provided by your employer); and your occupation.

Additionally, lenders may access credit reports from private rating agencies and databases in addition to the records managed by the Swiss central credit bureau (the Zentralstelle für Kreditinformation or ZEK).

More information:
Interactive Swiss personal loan comparison