Loan Refinancing: Guide and Offers in Switzerland

Loan refinancing can be the ideal solution to improve your financial situation, especially if you have several ongoing debts with high costs. Consolidating your financial commitments into a single solution can simplify your budget management and, in many cases, offer you a more advantageous interest rate.

Let's see together how it works and what the best offers are available in Switzerland from some of the main providers.

How Loan Refinancing Works

Refinancing, also known as "debt consolidation," is a financial operation in which one or more ongoing loans (which can be of various types, such as personal loans, leases, or credit card balances) are paid off and replaced with a single new loan. The goal of this new financing is to offer more favorable terms than the previous ones.

The main benefits of this operation are:

• Lower monthly payment: If you can get a lower interest rate or extend the repayment period, your monthly payment will decrease, freeing up liquidity for other expenses.

• One payment, one deadline: Instead of having to keep track of multiple payments, you have only one installment to honor, which significantly simplifies your budget management. You can delve deeper into the topic by reading our guide on how to repay a loan to a bank.

• Reduction of the total cost of the debt: A lower interest rate translates into lower overall costs in the long run.

This operation requires that you meet the same requirements for a loan in Switzerland, with the bank evaluating your creditworthiness and your current financial situation.

The Best Refinancing Offers of the Moment

The Swiss market offers various solutions for loan refinancing. The terms and interest rates vary based on your creditworthiness profile and the policy of the financial institution. It is essential to compare the offers to find the one that best suits you.

Here is an overview of the average conditions offered by some of the main players in the sector. For specific rates, we invite you to consult the providers' websites directly or use an online comparison tool, as they are subject to continuous changes.

• Bank-Now: Offers competitive rates, with a range starting from an effective annual rate of 6.9%. Property owners can benefit from even more advantageous rates, starting from 4.9%. It is a solid option for those seeking transparency and clear terms.

• Lend.ch: As a peer-to-peer (P2P) lending platform, it offers an alternative to traditional banks. The effective interest rates for a P2P loan are in a range between 4.5% and 9.8%. This can be an interesting choice for those looking for lower rates. To get a broader overview of this financial tool, you can read our guide on all types of personal loans in Switzerland.

• Migros Bank: Offers personal loans with effective annual rates that start from 4.9% and go up to 7.9%. Migros Bank is renowned for its reliability and for offering transparent and competitive terms, especially for customers with excellent creditworthiness.

• Raiffeisen: For personal loans, Raiffeisen relies on its partner Cembra Money Bank, which offers refinancing solutions with rates starting from 6.95%. Loans through this channel are characterized by quick access to funds and predictability thanks to fixed monthly installments.

• PostFinance: Through its collaboration with Bob Finance, PostFinance offers personal loans with interest rates that start from 4.90% and go up to 8.90%. The application process is completely online, making it convenient and fast.

• UBS: Although UBS primarily focuses on mortgages and corporate financing, it offers specific solutions for private clients that can also be used for refinancing. The rates, as with other banks, are personalized based on creditworthiness.

Evaluate and Compare Before Deciding

When you evaluate refinancing, don't limit yourself to looking only at the nominal interest rate. It is essential to consider the effective annual rate (EAR), which includes all ancillary costs, and the duration of the new loan. A lower rate over a longer duration may not be the most cost-effective solution in the long run.

Refinancing can be an excellent tool to ease your financial situation, but only if it is done thoughtfully and with full information. To be sure to find the product that best suits you, we recommend using an online comparison tool.

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