Swiss Consumer Credit Act

The Swiss consumer credit act (German: Bundesgesetz über den Konsumkredit or KKG, French: Loi fédérale sur le crédit à la consommation or LCC) regulates consumer loans of between 500 and 80,000 francs which are issued in Switzerland. These rules came into effect on January 1, 2003.

The regulations apply to credit cards, customer loyalty cards, private loans, leasing contracts and bank account overdrafts.

The consumer credit act defines which information must be included in consumer credit contacts.

The regulations also limit the maximum effective interest rate which lenders can charge.

The Swiss Federal Council adjusts interest rate limits to match the overall market environment on an annual basis.

Additionally, the KKG also defines the jurisdiction of credit bureaus, which track relevant credit data.

An important component of the KKG are the rules requiring lenders to check the creditworthiness of potential borrowers. Before a loan can be issued, lenders must consider a number of aspects of the applicant’s credit history, including any irregularities in the way in which their rent or other obligations are met, as recorded by a credit bureau.

If a lender is unsure about an applicant’s creditworthiness, they should request the applicant’s debt collection register report, proof of income and other documents which could help the lender protect the applicant from taking on more debt than they can manage.

As of 2016, loan providers are no longer allowed to aggressively market consumer credit products. However, it is up to the lending industry to define the interpretation of “aggressive marketing”.

Another change as of 2016 is that a 14-day cooling-off period, during which customers can cancel their loan application, now applies.

More information:
Swiss personal loan comparison
Leasing calculator
Loan calculator

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