Taking out a consumer loan allows you to finance personal projects — buying a vehicle, home renovations, travel, a wedding, or consolidating debts. But when life brings unexpected events, your repayment capacity can be affected. Illness, an accident, or job loss can quickly turn a manageable loan into a source of stress. This is why PPI – Payment Protection Insurance, commonly known in Switzerland as instalment insurance – exists.
At MultiCredit, we recommend this coverage to ensure the financial security of our clients. It acts as true credit protection: it steps in when the borrower is no longer able to meet monthly payments.
Comprehensive coverage for private individuals
PPI or instalment insurance protects the borrower in the following situations:
- Total incapacity to work due to illness or accident: the insurance pays the monthly instalments for the duration of the incapacity.
- Involuntary unemployment: in the case of a non-fault dismissal, the insurance covers the instalments for several months.
- Death: the outstanding balance of the loan is covered up to a maximum amount (often CHF 60,000.–), preventing the family from inheriting residual debt.
- Serious illness or loss of earning capacity (for self-employed individuals): the coverage helps maintain household stability despite an interruption of professional activity.
This insurance is not a legal requirement, but it provides valuable financial security for anyone taking out a private loan. It protects against credit-related risks and prevents unexpected events from creating long-term financial difficulties.
The concrete benefits of instalment insurance
PPI in its “instalment insurance” form offers several key advantages:
- Simplified process: no complex medical formalities; the insurance is taken out at the same time as the loan application.
- Fixed and predictable premium: the premium does not depend on age or profession and is calculated based on the monthly instalment (around 7.8% for standard coverage or 6.6% for the Plus option).
- Protection of personal finances: in the event of unforeseen circumstances, clients don’t need to use their savings or sell assets to keep repaying the loan.
- Maintaining the standard of living: some plans include an additional monthly payment (e.g., CHF 500.–) to compensate for lost income.
- Freedom of choice: the insurance is optional and does not influence the loan approval decision nor the loan amount.
A strict legal framework ensuring responsible lending
In Switzerland, the Federal Consumer Credit Act (LCC) and its implementing ordinance ensure a prudent approach to lending. Before any loan is approved, the borrower’s repayment capacity is analysed to prevent over-indebtedness.
PPI reinforces this responsible-lending philosophy: it anticipates the risk of non-payment and protects the borrower, their family, and the lender. The conditions are clearly outlined in the contract, the premium is transparent, and the client benefits from a 14-day withdrawal right in accordance with the LCC.
MultiCredit: a trusted partner for secure financing
Since 1999, MultiCredit has supported clients in financing their projects with a human, clear, and prudent approach. Thanks to reliable financial partners and insurers, we offer tailor-made solutions combining flexible loans with comprehensive PPI protection.
Our philosophy is simple: a well-structured loan should always be well protected. PPI — or instalment insurance — turns a loan into a long-lasting, secure solution, without fear of life’s uncertainties.
MultiCredit — responsible and protected credit.
Because every successful project deserves a level of security that matches your ambitions.
An article by Munur Aslan, Director of Multicredit.
