Credit in Switzerland: how to control debt and solvency?
Real estate loans, private loans, private loans, loan repurchases, etc. The study of the solvency of an applicant’s file is systematically carried out by financial institutions. Sometimes perceived as binding, this analysis maintains as a primary objective that of protecting the individual from excessive debt and preventing the bank from incurring non-payment. How is the solvency of an individual analyzed? How to get out of excessive debt? All you need to know to avoid financial difficulties.
Credit analysis: how does it work?
All Swiss financial institutions have access to the credit rating information of a resident of the country. This request for information is made for all requests for credit cards, leases or credit cards presented by private individuals. Both for the latter and for the lenders, this has a clear advantage: maximizing the chances that the credit is repaid without problems. To guarantee the solvency of a borrower, it is necessary to take an interest in his credit capacity and his ability to repay.
What is credit capacity?
Credit capacity is intended to determine whether the individual is able to repay the future monthly payment of the requested loan. To do this, you need to know your freely available income level. In concrete terms, this refers to your income minus the various expenses (for example: rent, other monthly payments of private credit, maturity of the mortgage). This income must be sufficient to allow repayment of the new loan and all interest over a maximum period of 36 months.
What is the repayment capacity?
The borrower’s repayment ability is determined by the probability that he is able to repay the loan. To this end, two main categories of information are put into perspective:
1) Payment history: all items related to completed or outstanding loans are included. Did they have problems with unpaid bills? Payments late? Etc.
2) National statistics: based on socio-demographic criteria (age, nationality, profession, etc.), repayment probabilities are established and serve as a basis for analysis.
What solution to deal with excessive debts?
Although a loan taken out in Switzerland was granted under the Federal Consumer Credit Act (LCC) and has complied with traditional debt standards, it can sometimes be faced with excessive debt. Job loss, income reduction, additional dependent children, health problems the causes of this situation are many. To avoid foreclosure or resale of your assets, fortunately there is an alternative solution for over-indebted people: the purchase of loans.
The repurchase of credits consists of grouping several credits into one. The advantage? The small monthly payments accumulated are now grouped in a single payment, with a single interlocutor and in a single period of time. Thanks to a better interest rate and / or a longer repayment period, it is possible to drastically reduce the monthly amount to be paid. The result: the return to a healthy and sustainable financial situation.