In 2024, 35.5 percent of all loan applications were turned down – a higher proportion than ever before, according to the loan comparison portal kreditvergleich.ch
According to the comparison portal Kreditvergleich, more than one in three consumer loan applications were rejected.
The platform bases its figures on data from the Swiss Central Credit Information Bureau (ZEK).
It shows that the consumer loan volume in 2024 amounted to approximately 4.15 billion francs, while the previous year it stood atl 4.79 billion.
Why are consumer loans harder to get?
More restrictive lending practices are the main reason.
Specifically, banks are increasingly focusing on risk minimisation and are more likely to reject applications from people with weak credit ratings, or ‘creditworthiness’ (read more about it below) – and there have been more of those in 2024, which is why fewer loans were granted.
This is how it works
Like almost everything in Switzerland, consumer loans are regulated by legislation, in this case the Consumer Credit Act.
It defines a loan as between 550 and 80,000 francs, “offered by commercial providers of financial services”. Lower or higher amounts are not subject to the Consumer Credit Act.
As is the case in many other countries, Swiss banks have strict criteria about who they lend money to. After all, no financial institution wants to deal with people who are not creditworthy and at risk of defaulting on a loan.
What exactly does this mean?
ZEK operates a central database which only banks and loan providers can access.
Basically, all your credit history, which includes your credit card use, loans, history of all open or denied credit applications, account overdrafts, and other such information, is stored in there.
However, ZEK contains not only the negative data.
If you are diligent about paying all your bills on time and not having any arrears, then this information is included there as well, and will serve you well if you ever need to take out a mortgage or another loan.
READ ALSO: Does having a good credit score matter in Switzerland?
Last but not least: Can foreign residents get a loan in Switzerland?
The answer is yes, but one if they meet certain requirements first.
For instance, they need to be a resident of Switzerland with a permanent employment contract and good salary, have a Swiss bank account, a valid residence permit (often C, or B after one year), and, yes, a good credit history.
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