Calculation of the maximum amount of your credit in Switzerland

Calculation of the maximum amount of your loan in Switzerland

Are you planning to apply for a loan in Switzerland? Do you want to calculate the maximum amount of credit you are entitled to? We will be happy to give you our advice by email or by phone.

The criteria set out in article 28 of the LCC (Federal Consumer Credit Act) are used only in the case of loans of less than USD 80,000, while the law does not concern loans of a higher entity. The intent of the legislation is to protect consumers from over-indebtedness: in fact, only those loans can be granted in Switzerland that those in debt are able to easily repay based on their economic situation. For single persons only income and expenses will be taken into consideration. For families, on the other hand, the income and expenses of the whole family budget will be considered (here you can find more information on this topic: Loan for two).

How is the maximum allowable amount of your loan calculated? Broadly speaking, the formula can be summarized as follows:

The following applies to every family budget: Income – Expenses = Free monthly amount

Maximum loan amount = Free monthly amount x 36

 Example Family budget: USD 5,000 (Income) – USD 4,000 (Expenditure) Margin available every month = USD 1,000

USD (Margin available every month) x 36 months = 36’000 USD (Maximum credit amount including interest). To evaluate the repayment capacity of the loan applicant, a period of 36 months must be taken as a reference, even if the stipulated duration is longer.


A thousand free USD each month allow a loan of up to USD 36,000


Compliance with this method of calculating the family budget is established by Swiss consumer protection law. However, many banks are unwilling to lend until the maximums established by law are reached. For example, we are aware of cases where the Cream bank has rejected loan applications for an amount equal to only 60% of the maximum permitted level. Furthermore, most banks do not accept any offer equal to the maximum amount, but in that case simply refuse it. A Best Bank, on the other hand, is happy to assist you in the application process and budget optimization, so that you can get the maximum amount possible together with the lowest interests.

For this reason, we analyze your financial situation with extreme care, considering, for example, the income of your partner, the scholarships, the apprentice salaries and other incomes that are part of the family budget, thus optimizing your budget. On the expenditure side, let’s take for example the reduction of insurance premiums. In case you already have loans in progress, it is worthwhile to consolidate the credit and in this way save interest by also obtaining a greater share of free income. In this way it will be possible to “take two pigeons with one stone.


Amounts in excess of USD 80,000

money loans

For amounts greater than USD 80,000, however, banks are not obliged to comply with Article 28 of the LCC and can grant loans that are clearly higher than the maximum allowed amount, which can be calculated through the budget calculation. In this case, however, the solvency of the person requesting the loan is carefully checked.


Reasons for refusing credit

The amount of credit as a cause for refusal

In this case, the request is rejected because the share of the free family budget is too small. In the event that a request for credit exceeding the limits allowed by law is presented, this must be refused. Thanks to our calculation systems we are able to evaluate with maximum precision the maximum amount you can aspire to given your economic situation. In turn, the possibility of refusal due to a lack of solvency is measured, which is verified with a request to the ZEK and to the Cantonal Office for Executions and Bankruptcies. If you already have open debt positions, it will be difficult to receive credit. If you then have foreclosures or a certificate of shortage in Switzerland, you will not find anyone willing to grant you a loan.

Conclusion: The maximum loan amount that you can receive is calculated by comparing income and expenses within your family budget. The legislator has established with the consumer protection law that for amounts less than USD 80,000 the maximum amount corresponds to the free share of the family budget multiplied by 36. Best Bank, our financing company, will be happy to help you obtain a loan of the maximum amount possible and at the lowest interest, so that you can both optimize your budget and the credit request.

Property Secured Credit: the option that is leaving bank credit behind

Did you know that your own home can be much more than the resting place or the space to receive friends and family? Especially if you are in need of money to solve an urgent problem, stay tuned to this tip. Your property can be used as collateral when getting a loan. And the best: interest rates can be much lower and payment terms longer than in a conventional situation of asking for credit. It even has a calculation showing the difference and believe me: the installments can be up to 85% smaller than in a conventional credit (see graph below).

How to get that credit? very similar to what we do with a personal loan or payroll loan, for example. The good news? that fintechs that already do this allow for a 100% online process.

The biggest difference to the loan you already know is that the Credit with Guarantee of Property requires another step for the money to be released: the house or apartment that remains as collateral needs to be inspected by a team. The purpose of this inspection? check the condition of the property and answer if it can be used or not as a guarantee.

The positive side is that the Property Guarantee Credit gives you the freedom to use the money in any way you want! The use of money is free , but look at some examples:


Exchanging expensive debt for a cheaper one

expensive debt

Who has never been surrounded by debt and without knowing or where to start? Using the loan money to pay your debts can be a good thing. The option is interesting both for those who have expensive debts, such as overdraft, and for those who have more than one debt (you will be able to organize yourself better if you put everything together in a single installment). But remember: there’s no use if you don’t plan your budget for the next few months. If not, the snowball starts again.


Opening your own business or franchise

Opening your own business or franchise

Have you thought about starting to take that plan to have your own business off the ground? If you invest the loan amount in your business, you will be able to pay off little by little, have a longer term and still realize your dream!


Have working capital


Is money also a good way to avoid getting into trouble with your business? It’s always good to have a plan B. But don’t forget: you need to plan because if the idea doesn’t work out, you still have the loan debt to pay, huh?


Make dreams come true

credit loan

There is nothing better than living a dream that we have always imagined. But it is worth mentioning, our choices have consequences and depend on our effort and planning to make them real!

Still not convinced that the Credit with Guarantee of Property can be a good exit that the options more used today? So look at the comparison of interest rates charged in various modalities, according to data from the Cream Bank.