How Much Loan Can I Afford?
Before applying for a loan, you should know exactly what monthly installment you can afford. A personal loan in Switzerland must fit your personal financial situation. In this guide, we show you how to calculate your maximum loan amount and the right monthly installment.
Contents
The 1/3 rule as a guideline
As a rule of thumb, the monthly loan installment should not exceed one-third of your disposable income. Disposable income is your net salary minus all fixed expenses such as rent, insurance, taxes, and living costs. Example: With a net salary of CHF 6'000 and fixed expenses of CHF 4'000, you have CHF 2'000 in disposable income. The maximum monthly installment would therefore be approximately CHF 660.
Calculating credit capacity
Credit capacity is assessed by the bank based on various factors: your income, your existing obligations, your expenses, and your employment situation. The Consumer Credit Act (KKG) stipulates that a loan may only be granted if the borrower could repay it within 36 months – even if the actual term is longer.
Creating a budget
Create a detailed monthly budget. List all income and expenses. Also consider irregular costs such as dental visits, car maintenance, or gifts. Plan a buffer of at least 10%. This ensures that the loan installment remains affordable even in unforeseen situations.
Tips for the right loan amount
Only take out as much credit as you actually need. A longer term lowers the monthly installment but increases the total cost through additional interest payments. Compare different scenarios with our loan calculator. Remember: Granting a loan is prohibited if it leads to over-indebtedness.
Frequently asked questions
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