The Swiss are known for being savings-oriented. In contrast to Americans, Swiss are not known for living on credit. But does the stereotypical saving and debt-free Swiss archetype really exist?
Independent online comparison service moneyland.ch conducted a survey aimed at revealing the financing, loan, leasing, mortgage and credit habits of the Swiss population. A total of 1500 individuals participated in the survey, which was carried out by market research institute Ipsos on behalf of moneyland.ch.
Participants were asked what types of financing they have made use of, and how often. They were also asked to state why they had gotten the loans.
The most frequently used financing tools compared
In total, nearly 85% of participants have gotten at least one personal loan, lease, mortgage or other form of financing. 44% of participants have gotten a private loan, 37% have gotten a personal loan from a commercial lender, 34% have taken on a lease.
“Loans and credit are surprisingly popular in Switzerland. The vast majority of Swiss have used some form of financing at least once,” states moneyland.ch CEO Benjamin Manz.
Broken down into individual categories, the survey paints a clear picture of borrowing habits: Swiss are most likely to get private loans from family or relatives (41% of survey participants have gotten a private loan at least once). Mortgages are the second most widely used form of financing (38% of participants have used at least one mortgage), followed by car leasing (33% of participants), credit card balances (33% of participants), personal loans from banks (33% of participants), installment plans from merchants (28% of participants), rental deposit pledge (21%), private loans from non-relatives (18%), personal loans from loan brokers (16%), business loans (9%), motorcycle leasing (6%) and personal loans from crowdlending platforms (6%).
What are loans used for?
Participants who have gotten loans were asked by moneyland.ch to state their motive for getting the loans. The most common reason for getting loans is car purchase financing, with 44% of borrowers having used at least one loan to pay for a car. The second most common motive for getting loans is financial difficulties (30%), followed by interior decorating and furniture (26%), paying off debt (25%), family (23%), electronics (21%), renovating a house or apartment (20%), payment of taxes (19%), financing education (18%), refinancing another loan (16%), travelling (16%), paying healthcare and medical bills (15%), business (12%), buying clothes (11%), buying stocks (8%) and buying cryptocurrencies like bitcoin (6%).
Personal loans: Brick-and-mortar lenders far surpass online loans
37% of the Swiss population have gotten at least one personal loan from a commercial lender. 33% have gotten at least one personal loan from a bank and 16% have gotten at least one loan through a loan broker. Online loans are not yet as widely used, with 7% of participants having gotten an online loan and 6% of participants having gotten a loan from a crowdlending platform.
It is interesting to note that there are major age-based differences in the way borrowers go about getting loans. A full 10% of young adults aged 18 to 25 have gotten loans from crowdlending platforms, compared to just 2% of adults aged 50 to 74 years old. By comparison, 18% of young adults aged 18 to 25 have gotten a personal loan at a bank, compared to 39% of adults aged 50 to 74 (more than double the proportion of young adults). “There is a clear trend towards wider adoption of online loans,” says Benjamin Manz.
Car leasing is exceptionally widespread
In total, around one third (34%) of survey participants have used a lease at least once. Car leasing is – by a wide margin – the most popular use of leasing (33% of participants have leased a car), while motorcycle leasing is notably lower at 6%. Car leasing is significantly more popular in rural areas (40%) than it is in urban areas (30%), with men (36%) than with women (29%) and in French-speaking Switzerland (44%) than in German-speaking Switzerland (27%).
Mortgages by region, age and wealth
In total, 38% of participants have used a mortgage at least once. There is a clear correlation between mortgages, age and wealth. The older and wealthier the individuals, the more likely they are to have used mortgages. A full 80% of millionaires have used at least one mortgage. Regardless of personal wealth, adults between the ages of 50 and 74 years old are disproportionately more likely to have used a mortgage, with 50% of adults in this age group having used at least one mortgage to obtain financing. Mortgages are more popular in French-speaking Switzerland and in rural areas than in other parts of the country. 42% of participants in French-speaking Switzerland have used mortgages, compared to 37% in German-speaking Switzerland. 44% of rural dwellers have used mortgages, compared to 36% of urban dwellers.
Borrowing behavior varies between age groups
Age plays a significant role in the types of financing used. 39% of adults aged 50 to 74 years old have gotten personal loans from banks, compared to 32% of adults aged 26 to 49 and 18% of adults aged 18 to 25. Compared to other age groups, young adults get more loans online, including loans from crowdlending platforms (10% of young adults have gotten loans from crowdlending platforms compared to 2% of adults in other age groups). Notable differences are also apparent in car leasing. Only 13% of adults aged 18 to 25 have leased a car, compared to 36% of adults aged 26 to 49 and 35% of adults aged 50 to 74. Motorcycle leasing, on the other hand, is more popular among young adults. 9% of young adults have leased a motorcycle, compared to just 2% of adults aged 50 to 74 years old.
Loans for consumer goods purchases widespread among young adults
The way in which loans are used also varies between age groups. Young adults (between the ages of 18 and 25) primarily use loans to finance education, to purchase goods for personal use, to buy electronics, to travel and to buy clothes. While car leases or purchases are the most common use of financing by adults in other age groups, young adults most commonly use loans to purchase electronics. 36% of adults aged 18 to 25 have used at least one loan to purchase electronics, compared to 34% who have used loans to buy cars.
Borrowing is more popular in French-speaking Switzerland
French-speaking Swiss are more likely to live on credit. Only 8% of participants in French-speaking Switzerland have never gotten a loan, credit, or some other form of financing – compared to 19% in German-speaking Switzerland.
Residents of French-speaking Switzerland are more likely to use loans to finance cars, furniture, electronics, clothes and healthcare expenses than German-speaking Swiss. German-speaking Swiss primarily use loans to finance tax payments, debt repayments, education and the refinancing of existing loans.
Urban vs. Rural: Differences in borrowing habits
12% of rural dwellers have never gotten a loan, credit or any other form of financing – compared to 17% of urban dwellers. Differences can be found in the different types of financing used. The most popular forms of financing in rural areas are mortgages (44% of rural dwellers have used a mortgage, compared to 36% of urban dwellers), car leasing (40% or rural dwellers compared to 30% of urban dwellers), private loans from relatives (43% of rural dwellers compared to 40% of urban dwellers) and personal loans from banks or brokers. Online loans are somewhat more popular in urban areas than in rural areas.
Switzerland’s urban population is more likely to use loans to finance furniture, clothing, travel, education, stock purchases, and goods for personal use. The rural population is more likely to use loans to finance cars and to repay debts.
Men are more likely to get loans than women
Men are more likely to get loans than women are. Only 14% of men have never gotten a loan or other form of financing, compared to 17% of women. This gender pattern is evident across all types of financing.