How is the loan different from a consumer loan?

Often we talk about a loan for larger amounts or for longer periods. This term is also often used in real estate financing.

But what is the difference between loan and consumer loan?

In Swiss law, both the loan and the consumer credit agreement are governed by the Swiss Code of Obligations or the related ancillary decrees. The loan as a special case of loan can be granted for a fee (against payment of interest) or free of charge (without interest). As a rule, the payment of a sum of money is agreed with the loan with simultaneous repayment obligation, so that other justifiable elements may also be the subject of the loan (eg securities or new goods produced in series). For individuals, a loan generates interest only if interest has been agreed. In commercial transactions, on the other hand, it is assumed that interest is due. It is also possible to take out a loan for an indefinite period. This loan must be repaid within six weeks of the first application.

Consumer loans are a special form of financing. In addition to loans, these also include deferred payments and other financial aid, including leasing contracts or the use of credit and debit cards. A feature of the consumer credit agreement is that the lender grants such consumer credit on a commercial basis (in the sense of carrying out a business activity) and the consumers – only natural persons are considered as such – make the credit for a purpose that it cannot be attributed to a professional or commercial activity.
Even if the above conditions are met, there is no consumer credit in the following cases:

• Loans secured by mortgages (mortgages)
• Sufficient asset-backed loans (pledged loan)
• Interest-free loans
• Loans of less than 500 francs or more than 80,000 francs
• Loans that must be repaid in a maximum of three months

In the case of consumer credit, the provisions of the Federal Consumer Credit Act and the mandatory provisions contained therein apply, as well as the requirements for preventing consumer over-indebtedness.

In summary, it is specified that the loan agreement and the consumer credit agreement are not contradictory legal terms. A loan can qualify as a consumer loan agreement if the above legal requirements are met.