Consumer Credit and Debt in Switzerland: Rules and Smart Payoff
The legal interest cap, how leasing works, and how to get out of debt.
6 min read · Loans & Credit
Credit is easy to obtain in Switzerland, but it can be expensive. The Consumer Credit Act (KKG) protects borrowers.
The 10 % cap
The maximum effective annual rate on consumer credit is 10 % (including fees). Banks must check ability to repay, which means your income must cover the loan after living costs. Credit card revolving interest is typically around 9–12 %, so avoid carrying balances.
- Total interest
- Interest at the 10 % cap
Example with default values. Open the calculator →
Right of withdrawal
You may withdraw from a consumer loan contract within 14 days of receiving a copy. Early repayment is allowed with a fair rebate of interest.
Leasing
Car leasing counts as consumer credit. Monthly payments look small because they only cover depreciation and interest, but total cost over several cycles is often higher than buying a used car. Watch for excess-kilometre fees and insurance requirements.
Getting out of debt
- List all debts with rates and minimum payments.
- Pay minimums everywhere, then focus extra money on the highest-rate debt (avalanche) or the smallest balance (snowball).
- Do not ignore reminders: unpaid bills lead to a Betreibung (debt enforcement) that stays on your record for years.
- Free debt-counselling services (Schuldenberatung) exist in every canton.
Compare strategies using our snowball vs. avalanche calculator.