There are two reasons for consumers living in Germany to apply for a loan in Switzerland. The rarer reason for borrowing from a federal bank is mortgage lending in Swiss francs.
These loans generally have lower interest rates than comparable mortgage loans from domestic banks, but they also have shorter fixed interest periods. Significantly more borrowers apply for their loan in Switzerland because they want a loan without Credit Bureau.
Reasons for the Credit Bureau-free loan application in Switzerland
Most consumers who apply for a Credit Bureau-free loan in Switzerland have forfeited at least one negative entry with Credit Bureau and are therefore difficult to obtain a loan from a domestic financial institution. The Swiss bank, on the other hand, does not make a Credit Bureau request, but only obtains credit information from the Swiss ZEK, whose database only contains data from contracts concluded there.
Even with a good Credit Bureau, banks can apply for a Credit Bureau-free loan in Switzerland, which is recommended if further financing is planned. Taking out more than one loan within six months causes the creditworthiness to deteriorate automatically, resulting in higher interest rates on real estate loans or other extensive financing projects.
Requirements for borrowing in Switzerland
In principle, only employees can apply for a Credit Bureau-free loan in Switzerland directly through the financial institution; only a small number of federal banks have extended their offer to freelancers and the self-employed. The loan amount is also usually limited to 3500 USD and at a few institutions to 5000 USD. A Credit Bureau-free Swiss loan is not a foreign currency loan, since the entire settlement is carried out in the USD currency.
The federal credit banks require an income from work that is higher than the garnishment limit so that they can directly access the wages of their credit customers in the event of improper repayment. They do not count additional income and child benefit as the income that is decisive for lending.
Anyone who does not meet all the conditions for direct lending or needs a loan amount of more than 3,500 to 5,000 USD can take out a Credit Bureaufree loan in Switzerland with the help of a credit broker. In this case, consumers make sure that the credit service provider does not charge any upfront costs, but only a reasonable commission if the brokerage is successful.