Working in Switzerland when you don’t live there involves several adaptations. And one of them is financial. You have to choose the right bank (s) to receive your salary, deposit your money, manage your transactions and save in the best possible conditions. What about consumer credit? Overview.
Who can apply for credit in Switzerland?
If you are a frontier worker, you must meet several criteria to be able to apply for a credit in Switzerland. If you work in the canton of Geneva, your employment contract must have been in effect for at least 12 months and in the other cantons, for at least 36 months at the time of your request. The other condition is to live in regions bordering Switzerland such as Ain, Doubs, Drôme, Haut-Rhin, Territoire de Belfort or Haute Savoie. The Swiss who live in France can also make a loan in Swiss territory under the same conditions.
The monthly payments are similar in France and Switzerland
If the customer looks directly with his bank to make his consumer credit in France, he will obtain advantageous rates around 2 and 3%. On the other hand, if he addresses specialized organizations like Lite Lending, the rates are much higher. They can go up to 20%. In this case, the monthly payments are similar in the two countries. For a credit of 10,000 USD over a period of 12 months, the consumer will pay between 853 USD and 876 USD at Fine Bank and between 847.64 dollars and 857.10 dollars at Instant Care Bank for example. In France, death, health and disability insurance are included in the monthly rate, while in Switzerland, only death insurance is included in the interest rate.
More flexible conditions
If in France, you have to give the reason for your credit request, in Switzerland, it is generally not required, which allows better confidentiality and freer use of your money. You can also ask for higher amounts (attention, always according to your income). In Switzerland, the amounts awarded can reach up to USD 80,000, rarely beyond even if banks such as Best Bank and Fine Bank offer maximum amounts of USD 250,000. In France, the ceiling is imposed at 75,000 dollars . But in general, the maximum rates granted do not exceed 20,000 dollars in France.
The issue of security is also taken into account. As you receive your salary in USD if you are a cross-border worker, it is more reasonable to open a credit in Switzerland so as not to be subject to fluctuations in the exchange rate during the duration of the reimbursement. Be careful however, if you lose your job, you will have to repay your Swiss credit in USD while you receive an unemployment annuity in dollars , which can be heavy to assume. The Best Bank is the only one to offer unemployment insurance for residents of Switzerland and cross-border commuters. All the others do not cover this risk for cross-border workers.
Chilly Swiss Banks
If you make a consumer credit in Switzerland, French banks do not have automatic access to it unless they request an extract from the ZEK (the credit information center in Switzerland) where the information of creditworthiness that comes from the credit activities of private households. Conversely, Swiss banks do not have access to the credit application history of French customers. But they can see your commitments by consulting the bank statement of your account. Banks are generally cautious with French border customers because they can leave Switzerland permanently and it will be more complicated to collect the debt.
If you are French border: taking a credit in Switzerland has the advantage of avoiding a change, which is safer especially when the repayment time is long. However, if you lose your job, having a credit in Switzerland is risky. You will have to repay a loan in USD when you receive your pension in dollars . In addition to that, Swiss banks are rather cautious with French customers, so you will surely not have an advantageous rate by taking a credit in Switzerland whereas if you take it in your French bank, it risks making you an offer at preferential rates.
If you want to obtain higher amounts, it can be interesting to make a credit in Switzerland where one can go up to 80,000 USD . But Swiss banks do not easily grant credit to the French. You are therefore not guaranteed to obtain such amounts.
If you are a Swiss border: you might think that there are advantages to making a loan in France, in view of the low rates that are offered. But in reality, you are very unlikely to get loans at these very advantageous rates. As you are not in principle a customer in a French bank, you should take a loan from specialized structures such as Lite Lending. And in this case, the monthly payments are very similar to those practiced in Switzerland. Financially, you do not gain more in one country or the other but you will benefit in Switzerland on the side of the amounts which are higher and freedom in the use of your credit, because you do not have need to give the reason for your purchase . You also gain by taking a loan in Switzerland in the sense that you avoid exchange.