Tips for a successful loan application

Many people who are considering taking out a loan are faced with the same question: What does it take for a loan application to be approved? If you follow certain basic rules, nothing stands in the way of success. Here we show you which points you need to take to heart.

A loan application is not granted without a thorough initial check. When applying for a loan, future investors want to know exactly who is behind the application and how reliably they can estimate the full repayment of their loan. After all, lenders lend a lot of money without having any direct security. To nevertheless obtain a certain degree of security, applicants are subjected to a budget check and a credit check.

Budget check & credit check

As part of the budget check, the borrower's ability to pay the desired monthly instalments is examined more closely. For this purpose, the monthly income is weighed against the monthly expenditure. This check is prescribed by the Swiss Consumer Credit Act and serves to prevent possible over-indebtedness.

The credit check verifies the borrower's intention to make contractually agreed loan repayments. For this purpose, mathematical probability models are used to assess past habits. A current debt enforcement report and credit agencies that have information on past payment behaviour are also consulted.

Good preparation significantly increases the chances of success

The better the results of the budget and credit check, the higher the chances of a successful loan application. Good preparation can be crucial here. There are a number of points that can have a positive impact on the loan application process and its outcome if they are considered.

Income

The total income should be clearly documented. Written salary statements from the employer can be used for this purpose. The same applies to any additional income. Keep these documents to hand.

Sum up all available income in your loan application. Married applicants or applicants living in a registered partnership can also declare the income of the other person and thus increase the countable income without having to include the second person in the contract.

Payment behaviour

Reliable debt repayments also improve your chances of obtaining a personal loan. Always pay your financial obligations, e.g. your credit card bill, reliably. In addition, ask the issuer of the credit or payment card to delete any outstanding payment arrears codes from the central credit databases after you have met your obligations.

The right time

Make your loan application while you are in permanent employment and not after you have been given notice.

Loan providers usually require that borrowers have been in permanent employment for at least three months. You should therefore only submit your loan application once you have completed your probationary period. If this ends three months ago, ask your employer to confirm this.

All negative credit enquiries have a negative effect on further enquiries, even from other credit providers. Therefore, if you receive a negative response, wait at least 6 months before submitting another loan application.

Generally important

Credit providers honour consistency in the credit check. This is also shown by the time spent at the current place of residence. For foreign nationals who have moved to Switzerland, the total length of residence in Switzerland is also an important factor for the success of a loan application.

The more contact options you offer, the better. The lender appreciates receiving your private and business contact details. This naturally includes telephone and mobile phone numbers as well as email addresses.

Loans that have already been paid off have a positive effect on your credit rating. Sensitive handling of money in the past is viewed positively, whereas negligent handling is viewed very negatively.

A reputable loan provider is also a must. Make enquiries before you waste time and possibly money with the wrong partner. Otherwise, your credit rating will suffer unnecessarily as a result of rejected loan applications.

Do you have any further questions? The LEND team will be happy to help you. You can also use our website to calculate your desired loan directly and submit a corresponding loan enquiry.