In Switzerland, there is a legal limit on the maximum interest which lenders can charge for consumer loans and account overdrafts. Because of climbing interest levels, the Swiss government has decided to raise this limit. The move was expected, as revealed by moneyland.ch research in January, 2023.
From May 1, 2023, the following maximum interest rates will apply to consumer loans:
- 11 percent for cash loans. This kind of loan is often referred to as a personal loan.
- 13 percent for account overdraft loans (including credit card loans).
Important: The new maximum interest rates only apply to contracts created after May 1, 2023. For existing contracts, the old maximum interest rate will continue to apply.
Interest rates for credit cards
What does the change mean for credit card users? Many credit cards have interest rates for carrying balances that border on the maximum legal interest rate. That limit is currently 12 percent, but is being raised to 13 percent. We can expect to see many credit card issuers raise their interest rates by 1 percent. “Regardless of the coming rate hikes, carrying credit card balances past the due date is never a good idea,” explains moneyland.ch CEO Benjamin Manz. The interest charges are very high.
Interest rates for personal loans
Existing loans will not be affected by the change. But the cost of new personal loans will continue to go up. Your creditworthiness will continue to play a key role in determining the exact interest rates you qualify for. Borrowers with good creditworthiness will continue to enjoy much lower interest rates than those with poor creditworthiness. “Even for small loans, offers vary broadly between issuers. That is why it is worth comparing offers from different lenders,” says Manz.
To make comparing easier, moneyland.ch offers a practical personal loan comparison and a credit card comparison.
More on this topic:
Compare Swiss personal loans now
Compare Swiss credit cards now
