Getting a personal loan from a bank or other lending institution is all very well. But taking advantage of a very attractive interest rate is even better! You'll be amazed at just how low interest rates are for credit of the same type and amount, can vary from one request to another. How can these differences be explained? How do banks determine interest rates for each customer? How do you obtain attractive interest rates ? In this article, you'll find the answers to all these questions!
Are there limits to the interest rates charged by banks?
Personal credit is a source of debt for households. To protect them from overindebtedness, the Consumer Credit Act (LCC) imposes limits on the interest rates charged by banks and all institutions offering credit to individuals. This is the maximum rate, which sets a ceiling on the interest a bank can charge on a loan granted to an individual or an association. In Switzerland today, the interest rate on your credit is is set at a maximum of 12%.
Failure to comply with this maximum interest rate is considered abuse, and may result in criminal penalties. Note, however, that this rate is only a ceiling. Each lending institution is therefore free to set the interest rate it wishes for each credit application. They will only be careful not to exceed maximum interest rate required by law.
Your creditworthiness influences the interest rate on your loan
Solvency is the first criterion taken into account by banks and lending institutions when setting the interest rate on your loan. It expresses your ability to repay a loan. Many factors are taken into account when determining your creditworthiness. These include the amount of your income, your expenses and your level of indebtedness.
If you want to obtain attractive interest rates, it's highly advisable to have a good credit rating. This starts with good financial management and regular, sufficient cash inflows. Conversely, if your creditworthiness is low, the bank will take more risk in granting you credit. It will therefore compensate for these risks by charging a higher interest rate.
Your credit history counts too!
All information concerning credit and financing for individuals is listed in a database called ZEK. Banks refer to this database before granting credit to their customers, and also before setting interest rates. Your financial history count! Difficulties in repaying your previous loans and disputes with your previous banks can encourage banks to charge high interest rates. On the other hand, if you've always repaid your loans on time and never fallen behind on your monthly payments, your chances of getting a mortgage are much better. advantageous rates will be more numerous.
Repayment amount and duration are also factors that can influence the interest rate on your loan.
Interest rates are also determined by the repayment amount and term. You can benefit from lower interest rates if you borrow large sums to be repaid in a short space of time. The longer the term, the higher the interest rate. Banks consider small, long-term loans to be more risky. That's why they apply higher interest rates if the repayment period is long.
A loan is more attractive in terms of interest rates. However, it's important to remember that monthly repayments are higher for this type of loan. Your debt ratio is therefore likely to rise during the repayment period. A credit A short-term loan is therefore advisable if you have a high repayment capacity. If not, opt for a longer-term loan, with lower monthly repayments.
Choosing the right financial institution
Not all banks charge the same interest rates! For example, for the same personal loan, The rate could vary from 3% to 4% from one bank to another. This is due to the fact that different banks in the Swiss market apply different rates depending on their risk assessment and commercial strategy.
You can use this pricing difference to lower the interest rate on your loan. Here's how, request the services of Lica to obtain the most advantageous credit for your situation. Once financing has been approved, don't miss your repayments. In case of delay, they will be registered with the ZEK. They will then be consulted by the banks when you take out another loan in the future, and you run the risk of having your loan refused.
Lack of experience: the last surprising criterion!
And yes, some banks do want to know about a future customer's payment experience. If he or she has never had private financing or consumer credit As a result, its data will be non-existent in the ZEK database, and a higher rate may be applied for lack of information. Paradoxical, yet in some cases, it's better to already have financing in place to obtain good conditions and a low interest rate. Apply for a credit card and pay your bills regularly can help you get better terms on future loans, for example.
Lica the neutral, independent credit provider
We are a neutral, independent service provider who can advise you on the best solution ! We consult your data and then make sure we find the best possible solution for your financing. If you're looking for a personal loan in Switzerland, you should definitely consider Lica as the solution for navigating the complex credit landscape!