{"id":10452,"date":"2017-03-15T08:35:27","date_gmt":"2017-03-15T08:35:27","guid":{"rendered":"https:\/\/multicredit.ch\/wp\/comparaison-des-taux-attention-aux-pieges\/"},"modified":"2022-03-30T07:26:36","modified_gmt":"2022-03-30T07:26:36","slug":"comparison-of-interest-rates-the-pitfalls-to-keep-in-mind","status":"publish","type":"post","link":"https:\/\/multicredit.ch\/en\/comparison-of-interest-rates-the-pitfalls-to-keep-in-mind\/","title":{"rendered":"Comparison of interest rates: the pitfalls to keep in mind"},"content":{"rendered":"

<\/span>Evolution of rates<\/span><\/h2>\n

Since mid-2016, the Swiss Confederation fixed a maximum rate of 10% for private loans. Before that, it was usual for loans to come with a 11.9% or higher interest rate. Since then, all offers are below 10%, and there are agencies offering loans with rates as low as 6.9% or even lower. However, the consumer has no insurance to pay less interest in the end. Indeed, the total cost of a personal credit depends on the repayment duration as well.<\/p>\n

<\/span>Repayment period: a variable not to forget<\/span><\/h2>\n

The planned repayment duration has an influence as important as the rate over the total cost of a loan. Indeed, the cost is proportional to the duration<\/b>! A 24 months loan will cost twice as much as the same loan over 12 months. Of course, a longer period means lower monthly bills<\/b>, which allows the lender to adapt its offer to the customer.<\/p>\n

However, the approcach is more questionable when the lender offers a lower interest in order to attract more customers, while compensating with a longer duration. The consumer will then be left, for example, with a 24 months contract when he could pay in 12 months only!<\/p>\n

<\/span>Comparison between rate and duration<\/span><\/h2>\n

One has only to look at the figures to see that a lower interest doesn’t always mean a lower cost. For example, a couple wants to borrow 20,000 Chf over 24 months, and torns between two offers:<\/p>\n