Repay your loan early in Switzerland
Have you taken out a personal loan and would like to repay it early? Repaying the loan early can save you considerable costs and give you financial freedom. In this blog post, you will find out why it makes sense to repay a loan early and how you should proceed.
Why is early repayment worthwhile?
Loans are a practical way of bridging major purchases or financial bottlenecks. However, lenders often charge high interest rates that add up over the term of the loan. By repaying early, you can significantly reduce the interest costs. A few advantages at a glance:
- Interest savings: The faster you repay the loan, the less interest you pay. This can save you hundreds or even thousands of francs.
- Debt-free: Being debt-free gives you a good feeling and more financial freedom for future projects.
- Better credit rating: Early repayment can have a positive effect on your credit rating and secure you better conditions for future loans.
What should you bear in mind?
Before you decide to repay your loan early, there are a few points you should bear in mind:
- Early repayment fees: Some lenders charge a fee for early repayment. This can vary depending on the provider, but is usually between 100 and 200 francs. Check whether the savings from the interest exceed the fee.
- Calculate remaining debt: Make sure you know the exact remaining debt. Sometimes the lender's calculations can be incorrect. The
Early Loan Settlement Calculator can be very helpful here. - Financial situation: Consider whether you can afford the early repayment without getting into financial difficulties. There is little point in repaying a loan early if you are taking on too much financial burden.
How do you proceed?
If you have decided to repay your loan early, proceed as follows:
- Contact your lender: Inform your credit institution that you would like to repay the loan early. Ask for a detailed final statement.
- Check the final statement: Compare the information with your own calculations or use a loan calculator to check the remaining debt. If there are any differences, clarify them directly with your lender.
- Settle the remaining debt: If everything is correct, transfer the remaining amount and make sure that you receive confirmation of full repayment.
Alternative: Debt rescheduling
If immediate repayment is not possible, you could consider debt rescheduling. This involves taking out a new loan with better terms and repaying the existing loan. This can be particularly useful if interest rates have fallen or your credit rating has improved.
Frequently asked questions on the topic of "Repaying a loan early"
Yes, some lenders charge a fee for early repayment. This can be between 100 and 200 francs. It is worth factoring these costs into your calculations to ensure that early repayment is still advantageous.
Your lender should provide you with a detailed breakdown of the remaining debt on request. You can also use a loan calculator to make your own calculations.
If you notice any discrepancies in the final statement, you should clarify these immediately with your lender. It is important that the remaining debt is calculated correctly to avoid unnecessary costs.
It depends on the lender. Some offer the option of early repayment free of charge, others do not. Check your loan agreement or ask your lender directly.
If early repayment is not possible, you can continue to repay the loan as planned. Alternatively, you can consider debt rescheduling to benefit from better conditions.
As a rule, you will need your loan agreement and the current statement of outstanding debt. Your lender can tell you exactly which documents are required.
Yes, many lenders also allow partial repayments. These can also help to reduce interest costs. Ask your lender about the exact conditions.
The processing time can vary depending on the lender. However, it usually takes no longer than a few days until the repayment is booked and you receive a confirmation.
Yes, if you have taken out residual debt insurance, you should also cancel this as soon as the loan has been repaid in full. Contact your insurer to do this.