credit loan costs switzerland

Loans in Switzerland: What Do They Cost?

Loans in Switzerland vary with regards to their interest rates, terms and conditions depending on the lender and specific offer. A comparison can help you get the best deal.

The Swiss Consumer Credit Act sets limits for the maximum cost of a loan. The maximum interest rate which lenders can charge is now limited to 10 percent for loans and 12 percent for credit card balances. (Before July 2016, the maximum rate was 15 percent. You can read our news update here).

Many Swiss credit card issuers charge the maximum permissible interest rate for credit card balances. Because of the high interest rate, carrying a balance on your credit card is not recommended. A personal loan can often provide the cheaper solution, particularly if you have excellent credit.

Loan interest rates compared

Swiss interest rates for consumer loans vary between a minimum of 4.9% and a maximum of 10% per annum. In some cases, homeowners can benefit from interest rates as low as 4.5%.

Using the effective interest rate, the loan term and the loan amount, you can calculate the full cost of a loan. The loan calculator from reduces this process to a few clicks.

The formula used by all Swiss lenders to calculate interest charges is the same formula which is used by the unbiased loan comparison and loan calculator by On the results page of the comparison, you can see the exact costs of each loan offer, as per this formula.

Cost differences between loans

This example can help you understand the major differences in the costs of different kinds of loans: The most affordable personal loan offers currently have interest rates of around 5.9% per annum.

At that rate, a 15,000-franc loan with a 24-month loan term would cost you a total of 914.40 francs. That means that, by the end of the loan’s life, you will have paid a total of 15,914 francs, including the loan repayment and interest.

The more expensive offers on the market currently average 10% interest per annum. At that rate, you will pay a much higher 1540.80 francs for the same amount and an identical loan term. In other words, you could pay as much as 626 francs more for the same loan if you go with an expensive lender.

Comparing offers helps you save

Comparing loan offers before you settle on a loan is important. What makes things more complicated is the fact that not all applicants will be eligible for the cheapest loans. The rule of thumb here is: the cheaper the loan, the better your credit will have to be for your application to be accepted.

The bar for being approved for affordable loans is generally set higher than it is for more expensive loans. Some of the important criteria are accounted for in the personal loan comparison. Only loans that match the information you enter will be included in the results list.

Beware of long loan terms

Avoid taking out long-term loans whenever possible. The simple reason: The longer the loan term, the more expensive the loan.

An example can help to clarify this: If you borrowed 20,000 francs at an effective annual interest rate of 7.9% over a 12-month term, that loan would cost you around 836 francs, the equivalent of 4.2% of the amount you borrowed.

Getting the same loan with a 24-month term would cost you 1628 francs (equal to 8.14% of the loan). That means you would pay more than 790 francs more to borrow the same amount of money over twice as long a loan term.

If you opt for a loan term of 36 months, you had better have deep pockets because the same loan will cost you a total of 2439 francs. That’s a markup of more than 12% on top of the loan amount.

More on this topic:
Unbiased Swiss loan comparison
Loan calculator: find the true cost of loans
Swiss personal loans: things you should know
Car leasing in Switzerland: key tips
Online loans in Switzerland: a closer look
Effective annual interest rates explained
Swiss consumer credit law explained

About Moneyland Magazine

The magazine provides accurate, unbiased information on topics related to finance and money. In addition to research and expert interviews, the magazine contains numerous financial guides.