How does the private loan work in Switzerland?


Today, the credit sector occupies an important place in almost every household in Switzerland. One in two people use private credit to finance their projects or achieve a goal faster. However, it is always a good idea to be well informed on the essential points concerning the private loan before embarking on a request. In this new article, Lica explains in detail how private loans work in Switzerland.

A little reminder on the history of private lending ...

The loan system has evolved a lot over the years. But, it should be noted that the mechanism has not always been well regarded throughout its existence. This practice has emerged since ancient Greece with trapezites before quickly democratizing in the rest of the world. However, the arrival of Christendom caused some mistrust as the practice of lending a private loan was considered abusive.

The risks to which they were exposed did not prevent foreigners including Jews from offering loans with interest rates. In France, credit with an interest rate becomes legal from 1789. This then happens at the start of the French Revolution with a legal rate imposed at 5 %. The private loan is also shown in different forms such as "slate" or loans in "small businesses".

Thus, the private loan begins to take shape and settles in our society from the XIXe century. At this time, small artisans began to offer financial aid when they had the opportunity. In any case, know that a private lender is a simple third party who has a sum of money available. He can lend it to whoever really needs it to carry out his project. And the majority of private lenders prefer to bet on real estate projects.

How a private loan works

In addition to financing private projects, some private lenders also engage in business credit. However, in either case, a lender should always check certain criteria to protect against the loss of the money loaned. So a detailed analysis of your loan application with the help of an experienced intermediary is always a great thing! In this sense, Lica supports you in obtaining a loan at the best market conditions thanks to the meticulous preparation of your file.

Now let's see what are the detailed elements that make up the private loan:

The loan amount

In Switzerland, a private loan can be between CHF 3,000.- to CHF 400,000.-. The amount of private credit granted will depend on your situation, your financial history and the overall quality of the application file. For more information on the decisive criteria for obtaining a loan on favorable terms, you can consult our article “How to get private credit at a low rate

The income / monthly payment ratio

To ensure that your monthly loan repayment payments correlate with your income, lenders make sure that the ratio of your monthly income to your monthly payment does not generally exceed 35%. Thus, for an income of 5,000.-, your monthly payment could not exceed the sum of CHF 1,750.-.

Application fee

Certain private loans may well include administrative fees that should not be ignored. These can amount from 1% to 5 % of the credit amount. The costs normally concern the analysis of your file taking into account all the terms. At Lica, the private loans offered are always free of charge!

The interest rate

The interest rate for a private loan varies largely between 3.9% and 9.9%. It will depend on your ability to negotiate and the quality of your case. Here you can count on the service of Lica to negotiate the best possible conditions for your private credit and ensure the defense of your interests towards the various lenders on the market.

The duration of the loan

The majority of private lenders prefer short-term loans. So, you should expect the length of your contract to be 120 months at most. Remember, your lender is also thinking about getting their money's worth at the same time.

The penalty

It is quite possible to repay the loan before the due date. Also, expect some lenders to charge you early termination fees. In addition, it may also charge additional interest if you are late in repaying. On this point, you can be assured that Lica works exclusively with lenders who do not charge fees during an early repayment of your private loan. The financial flexibility of our clients is a crucial element for us!


In some cases, having certain additional guarantees besides income may give you an advantage over the terms granted by a lender. For example, being the owner of your home will give you the right to a discount on the interest rate on your private loan.

Monthly installments

It is advisable to establish the monthly payments with your lender before he releases the sum of your private financing. Several repayment terms can be offered. Therefore, take the time to choose the duration that best fits your budget.

What are the advantages of a private loan

You should know that a private loan has a win-win aspect for the lender and the borrower. Indeed, this type of financial assistance offers the following advantages:

A loan that is easier to obtain

As a borrower, it will be easier for you to obtain the amount offered by your lender. Obtaining the money does not require many conditions as with mortgages. In addition, by seeking the help of a private credit broker, you will not even need to waste time in competition between providers and in the preparation of your file!

The lender can easily get his money back

As you already know, a private loan is a type of loan established for a short duration. This implies that the lender will not have to wait many years to get all of their money back with interest. He can then invest quickly in another project.

Find the right partner to carry out your private loan application

It is important to take into account certain risks before applying for private credit. You can perfectly rely on the following points:

Make sure your intermediary is serious!

We can not emphasize this enough ! Be sure that your private loan intermediary has a good reputation and that it is recognized as such in the market. A quick check on social networks, a verification of the address and the Google profile of the lender can avoid all disappointments during your loan application.

Get the answers you want to your questions

Whether this is your first loan or even if you have a long experience in private loans, demand that your interlocutor can answer your questions precisely before you commit. A professional must be able to answer all your questions straight away!

Read your contract carefully before signing it

Although your credit intermediary protects you against signing a contract containing unfair terms, reading it will allow you to fully understand the commitments you make. Carefully reading the conditions attached to your credit agreement is therefore an important point to respect.

How private lending works in summary

The functioning of a private loan in Switzerland is conditioned by many factors which are always interesting to know. A private loan is a long-term commitment and it is therefore important to us to provide our clients with good information. Thus, you make a good decision with full knowledge of the facts.

Now that you know how the private loan works in Switzerland, all you have to do is apply. With Lica It's simple, fast and effective ! And yes, you make your request online in less than 2 minutes and then our specialized teams will do the work for you. This saves you time and money! To apply for a loan without commitment, all you have to do is click on the following button:

Do you have questions before making your request? Our advisers are there to answer your questions 7 days a week. Ask us for more information and we will be happy to answer you.

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Highest acceptance rate in Switzerland
Your request in less than 2 minutes
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No administration fees
✓ Highest acceptance rate in Switzerland
✓ Your request in less than 2 minutes
✓ The best market conditions
✓ An answer in less than 24 hours
✓ No administration fees

Private loan

3'000.- to 400'000.-
Rate from 3.9%

Real estate loan

250'000.- to 3'000'000.-
Rate from 0.75%

Business loan

50'000.- to 1'000'000.-
Rate from 2.9%