In Switzerland, it is the banks that set the interest rate when granting, at least within the limits imposed by law. The conditions will then depend essentially on the situation of the applicant and his background. What are the ways to optimize your file to get a better rate? Discover our 6 tips.
What determines the rate?
The interest rate is directly proportional to the risk. A person with a “delicate” situation will be judged as more risky by the banks than an applicant who benefits from a good situation. The higher the risk of default, the higher the interest rate. Overall, the contractual conditions offered will depend on:
- The good repute of the customer: has he ever had a history like bad payment? ZEK codes? Prosecution problems? Has he made numerous requests for credit without follow-up with different organizations?
- Client’s creditworthiness: what is their income, but what are their expenses as well? How long has he been working with his current employer? Does he have a stable or temporary job?
Whatever the risk represented by the applicant, the Confederation sets a maximum rate of 10%.
What are the current rates?
Most establishments offer an interest varying between 5.9% and 9.9% (rarely less). It should however be borne in mind that rates below 7.9% are rare. Thus, it is estimated that the majority of contracts signed have a rate of 8.9% or more. There are still few customers who benefit from offers at 6.9% or less.
How can I get a better rate? Here we offer 6 tips to help future borrowers to optimize their situation and obtain better loan conditions.
1. Do not forget to declare the income of your spouse
If it is not mandatory to also declare the salary of your husband / wife, it is strongly recommended to do so. Indeed, the bank will then be able to take into account not just one income, but the combination of the two salaries to calculate the budget, thereby improving the solvency significantly.
2. Don’t forget to report any incidental income
It is a fact, many claimants forget that they can declare all their ancillary income to the bank, and too often forget to do so. Each improvement in the budget helps to reduce the risk, and therefore to lower the interest rate. So the following should not be overlooked:
- A second income: second job, annuities, rental income, etc.
- Allowances: family allowances, training allowances, etc.
- Bonuses linked to the main job: bonuses, bonuses, gratuities, etc.
- The possible salary of the children: for example if children live under the same roof and receive an income (apprenticeship,…)
- Any subsidies: for example health insurance
3. Attach as many supporting documents as possible
When applying for credit, each item that influences the budget should not only be declared, but also supported by a copy of a certificate. Attaching supporting documents not only accelerates the processing of the file, but also sometimes improves its scoring with banks.
4. Avoid making too many requests at the same time
In Switzerland, each request for a private loan is registered with a central office (ZEK). Making too many requests in a short period of time may thus contribute to reducing, in the eyes of the banks, the honorability of the applicant who may find himself penalized, or even blocked.
This advice is all the most important in case of refusal. A refused credit request is also registered at the central office. Rather than immediately making another request to another establishment, it is better to wait a few months (3 to 6 months minimum) before repeating the process.
5. Pay your bills regularly
A customer who has already made one or more loans in the past and who has paid his invoices on time will be all the better perceived by the bank. A positive track record can thus help to improve the good repute of the client, and therefore allow for better loan conditions in the future.
6. Get help from a specialist
If it is entirely possible to apply for a loan from a bank, it may be recommended to go through a specialized intermediary such as Creditfast, which offers individual management of the file leading to credit at the best rate.
Indeed, a specialist will be able to analyze the overall situation of his client and verify that the file is complete and optimized before sending to the bank. In addition to optimizing the file, he can also sometimes play on his influence and negotiate better conditions with his partners.