Interest

Repayment of the loan, payment of interest... We explain your payment plan to see the total cost.

 

A personal loan. What's that?

This is an interest-bearing loan with a warranty.

You have the option to use the money you don't have as you see fit, whether it's bill payments or personal projects.

The repayment of the money paid and the calculated interest, including all fees, is generally done between 12 and 120 months, which directly influences the total cost of your loan.

Of course, an analysis of your preliminary file is carried out in order to confirm your solvency and avoid a case of over-indebtedness.

It is also important to note that consumer credit is regulated by law.

Duration!

We were referring to the repayment period.

This duration obviously influences the amount of your monthly payments, which decreases.

However, the total cost of credit increases with the term.

So you'll pay less, in total, if you pay back in 12 months instead of 36 months.

What is a monthly payment?

This is the monthly amount you will pay to the lender in order to pay off your credit within the allotted term.

If you take out a loan that will have to be repaid in two years, you will have to pay 24 monthly payments.

These 24 monthly instalments will be shown on 24 lines in your amortization table.

What is depreciation?

Imagine that you are loaned CHF 12,000 interest-free and you have to pay that amount back within a year.

This means that you will have 12 monthly instalments of CHF 1,000.

The amortization, i.e. the monthly accounting of each payment made, will be CHF 1,000 per month.

You will therefore amortize the entire loan after twelve months to pay it off.

What about the depreciation table?

It is a simple document that allows you to view, month by month, the portion of amortization and the portion of interest used to pay off your loan as you go along.

An outstanding balance usually accompanies an updated depreciation schedule. This way, you will know how much remains to be repaid to the lender at all times.

The interest?

Of course, a loan is not free; An interest rate is applied.

Depending on the term, the amount borrowed and the contractual terms defined with the lender, interest will be calculated.

This interest covers all the costs related to your loan. It is also a form of remuneration and risk hedging relating to the lending of money over a fixed period. This also covers management costs.

In order to simplify the repayment process, your monthly payments are fixed.

You will therefore pay the same monthly instalment, each month, which includes both the amortization portion of the amount borrowed and the interest.

If you add up all your monthly payments and subtract the amount of the loan, you will know the real cost of your loan.

So I'm paying the same amount of interest every month?

No.

You will pay the same monthly instalment, but the interest and amortization costs vary from month to month.

At the beginning of your repayment period, you'll pay more interest and amortize less.

As payments are made, the interest portion will decrease and the depreciation portion will increase.

This, without the amount of your monthly payments varying and until the total repayment, including interest, of your loan.

What if I can't pay my monthly instalments?

It's common to deal with unforeseen financial events. In this case, it is important to discuss this with your credit partner as soon as possible. Together, you can explore solutions that are right for you. By being transparent and responsive, you will increase your chances of finding a balanced solution. This will prevent you from having problems with the ZEK.

Don't forget that there are rights and obligations that govern the contract signed with the lending bank.

What if, on the other hand, I am able to anticipate the full repayment?

The Consumer Credit Act states that you have the right to pay off your credit at any time.

A refund to your advantage can also be made in the event of an overpayment of interest proportions. Be careful, however, because, even if relatively low, cancellation fees may be charged by the lender. In some cases, there is none.

The best rate. The best service.

As you can see, calculating the cost of your loan and managing your amortization schedule is not complicated in itself.

The important thing is to assess your repayment capacity, control your budget and choose the right partner to build your credit request.

What for?

Taking out a loan is contractually binding. A risk of over-indebtedness must be avoided at all costs.

As soon as your situation is healthy, move forward with peace of mind to carry out your project.

The next step is to build your credit application. To maximize your chances of acceptance, surround yourself with good advisors, experts who are familiar with administrative requirements and know how to prepare and submit your file to lenders.

Finally, opt for a financing platform that has a wide range of banking partners; one that is well-established and adheres to an ethical charter for the benefit of its customers' interests.

A little revision.

1. An amortization is the monthly repayment of your loan.

True or False?

2. Your monthly payments are fixed.

True or False?

3. If you add up all your monthly payments and deduct the amount of your loan, you get the real cost of your loan.

True or False?

4. The portion of the interest paid each month is fixed.

True or False?

5. You'll pay less for your loan if you spread your repayment over a longer period.

True or False?

6. You have the right to repay early.

True or False?

7. Bonus question not provided for in the curriculum. You have to pay a fee to build your credit report.

True or False?

 

 Answers:

1. V
2. V
3. V
4. F
5. F
6. V
7. F (Opt for a financing platform that has a 0-fee policy, like Milenia!)

 

 

 

 

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In the jungle of credit cards, you might as well aim for simplicity and clarity; values dear to Milenia. That's good, get yours by making your request to your personal advisor. It's free!

We've talked about this before

Among our privileged partners, Cembra represents everything that constitutes a benevolent and qualitative collaboration.

As a flagship of financial services in Switzerland, this partner has been able to develop its activities over time by demonstrating a spirit of innovation in consumer credit, leasing, invoice purchases and credit card management.

Headquartered in Zürich with a history of more than a hundred years, we are proud to collaborate with Cembra in a spirit dedicated to a service offering aimed at meeting the precise needs of our customers.

For all these reasons, we decided to collaborate with Cembra and create the Certo credit card! One Mastercard® by Milenia.

Let's Talk Credit Card

Thanks to its own network of retail partners, Cembra customers benefit from special conditions with brands such as Coop or Migros.

As is often the case, you have the option to choose from different credit card options. In this case, depending on your financial means, you can opt for a Premium or Gold card.

Let's get to the heart of the matter

Your Certo! One Mastercard® by Milenia can be used worldwide.

Millions of businesses are linked so there's no risk of not being able to make your purchase no matter where you are, no matter the product.

Like any self-respecting credit card, you can pay in a physical store or online. This is normal.

Need to withdraw cash from an ATM? That's possible too.

In Switzerland and abroad? Of course.

Interest rate ?

You have the option of reimbursing all of your expenses indicated on the invoice or staggering the repayment over time, in which case the interest rate will be 11.95%.

Tech

Your payment card is contactless. You can pay amounts up to CHF 80 by holding your credit card close to the terminal to pay for the purchase, without entering your PIN.

The e-service is also appreciable. Access your history and personal data in just a few clicks.

Need emergency help? A hotline is available 24/7.

Okay, but it's not revolutionary...

That's why Cembra is launching Certo!

Do you have a Cumulus Mastercard? Make a free exchange to get the Certo! It's easy and free of charge.

What are the benefits ?

Do you shop at the Coop or Migros? Do you use SBB? Bingo! Using your Certo! You get discounts of up to 1% of your purchases.

Every three months, your accumulated savings are returned to you.

Other benefits through special actions and discounts applied in the context of short-term or long-term partnerships remain in force.

In addition, you can also access the "Cheapest Price Guaranteed" service. We'll tell you more about it later.

Terms & Conditions

Quality and responsibility are the other two values that are important to us. So we've taken care to go through the terms and conditions for you.

Admit it, you rarely do it, don't you ?

No problem! Here are our findings :

Is it still possible to spread my refunds upon receipt of an invoice ?

Yes.

What about transaction and withdrawal fees, especially abroad ?

Fees are applied either as a minimum flat rate (e.g. CHF 5 for a withdrawal abroad) or as a percentage per transaction. The rates applied are in line with the market prices.

And the lowest price guarantee ?

The short answer is yes, it's a service offered.

Be careful, however, it is important to take out an insurance policy covering this type of service and the associated conditions, which are not necessarily that simple.

Some products are excluded from the warranty. Power supply, for example, or vehicles.

A minimum price differential is applied, deadlines are imposed and it is necessary to fill out a file for each case encountered if applicable.

What about the percentage of discounts leading to savings ?

For once, nothing to complain about! You save between 0.33% and 1% on your purchases at the largest retailers in Switzerland. It's appreciable.

Milenia

At Milenia, we work every day to make your projects a reality. We are committed  to meeting your expectations and the challenges encountered on your life path.

Whether it's for a personal loan, real estate financing, job loss insurance, an advantageous credit card, cleaning your data or a business loan... We're here with you.

Finding the best offer, the formula best suited to your reality, the solution that truly suits your means... That's what drives us.

Whatever your personal situation, whether you want to finance a personal project or rather want to improve your cash flow, do not hesitate to visit our website.

You will be able to carry out simulations, learn about our various solutions or simply learn about the many articles on our blog.

Thousands of customers trust us every year. As part of the merger with credaris, Milenia is now the leading financing platform in Switzerland.

It is thanks to you and it is therefore quite naturally for you that we redouble our efforts to satisfy you.

Apply for your Certo card! One Mastercard® by Milenia

Speaking of advantageous credit cards and our desire to satisfy you, thanks to our partnership with Cembra, we can send you your Certo card!

All you have to do is contact your personal advisor.

Your credit card, made of recycled plastic, in Milenia's colors, will be offered to you !

No application fees, no annual membership fees to pay and the maintenance of all the benefits !

And if you'd like an extra card, it's free too !

When we told you that we were by your side…

 

 

 

 

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We take a look at the issue of rates for consumer credit and your mortgage.

 

Need a personal loan in 2024? What's changing?

The Ordinance on the Federal Act on Consumer Credit aims to set a course for the interest rates charged by banks and credit brokers.

What for?

Simply to protect the interests of the consumer.

As it is a quick and easy financing solution that also represents a greater risk for lenders, the interest rates charged are generally higher.

In order to avoid cases of over-indebtedness and to limit the emergence of unscrupulous players in the sector, a maximum interest rate is applied, a "cap".

Funding platforms are required to meet this milestone.

The mechanisms used to set the maximum rate are often linked to upward or downward trends in interest rates as well as the policy rate determined by the country's financial and political authorities.

It is for this reason that an increase in the maximum rate was decided and implemented from 1 January 2024. It will now be a maximum of 12%.

Is my credit impacted?

The potential application of this maximum rate is only relevant for contracts concluded after 1 January 2024. A contract signed before is therefore not impacted.

Need a mortgage? Are rates falling?

This is the question asked by many homeowners or future homeowners. Especially after the recent rise in mortgage rates after a period of historically low rates.

Inflation over the past two years has had a significant impact on interest rates. Depending on the duration of the contract, rates have been close to 4-5%, generating widespread concern about the ability of homeowners to repay if this were to last or even worsen in the long term.

The key interest rates decided by central banks in the United States and Europe were the triggers for this increase. These decisions were taken to counter a risk to the world economy caused by uncontrolled price increases.

Fortunately, the latest trends and figures show that inflation is stabilising or even falling. The consequence is a relative calm in the markets and a return to lower levels of applied interest rates.

And what about the Saron?

The Saron, the successor to Libor, bases its interest rate on the actual daily transactions on the Swiss money market.

This implies a certain degree of volatility that can work to the disadvantage of buyers opting to incorporate the Saron into their mortgage structure.

More advantageous than a fixed rate in 2023, the Saron rate has gradually caught up with the heights reached by these fixed rates.

It is more imperative than ever to get good advice on the advisability or risk of including a share of Saron in your loan.

What are the forecasts for 2024?

The current trend is rather downward and most financial institutions agree that rates will stabilize in 2024.

However, no one is able to guarantee this. What for?

First, inflation, although currently under control, is not fully stabilized.

Central banks will avoid cutting policy rates too hastily unless recessions are on the horizon.

This is the main indicator influencing borrowing interest rates in the countries concerned.

Unfortunately, the geopolitical reality remains extremely volatile.

The economic conflict between the United States and China continues to rage. The world's two major players are constantly fighting over access to cutting-edge technologies. The effects are devastating for Europe's growth recovery.

This has an impact on the climate of confidence in the financial sector.

To make matters worse, the recent elections in Taiwan have generated even more protests and provocations from the Chinese authorities. As Taiwan is a technological and industrial powerhouse in Asia, any impairment of its ability to produce and export would have significant consequences for global trade.

The conflict in the Middle East, the end of which does not seem to be in sight, as well as the risk of spreading to other territories in the region, do nothing to stabilize the markets. Added to this is the risk posed to maritime transport near Yemen; This prevents the passage of goods and could impact the entire supply chain.

Of course, the ongoing war in Ukraine continues to cause terrible loss of life but also economic damage throughout the region. As Russia is an important economic player but also a considerable military force, its collaboration with neighbouring countries such as China and even North Korea is a vector of uncertainty and fears about a potential way out of the crisis.

So yes, geopolitical events have an immediate influence on your mortgage rate and how it will evolve in the months and years to come.

Another alternative?

Despite this geopolitical reality, life must go on. Your projects don't wait and to make them a reality, funding is often necessary.

The route of a mortgage loan for a real estate project remains the first option.

Taking into account the current context, the choice of the contract term, the proposed rates and the formula with or without Saron, must be made judiciously.

However, if it is a project that requires little financing due to a large down payment or if we are talking about renovation or a reduced purchase amount, credit can be an alternative solution.

Of course, the rate is higher, but it is very likely that you will not reach the maximum rate imposed as described above. In addition, the rate granted remains fixed.

Other significant advantages are the absence of the obligation to justify the use of the loaned funds, less administrative management, the absence of a notarial deed and the simplicity and speed of execution of the payment of your money.

In addition, you have the right to change your loan formula or intermediary at any time, as well as free application and advice.

As always, a wise choice requires a good deal of thought and any decision must be made with respect to your budget reality and your ability to repay. Whether it's a mortgage or a personal loan, surround yourself with good advisors.

At Milenia, we will be able to guide you in the realization of your project. Free of charge and without obligation. Contact us to find out more!

 

 

 

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