Keystone-SDA
Good news for debtors: from January 1, 2025 the maximum interest rate for consumer credits drops by 1 percentage point, reaching 11% for cash loans and 13% for those in the form of an advance on current account.
This content was published November 21, 2024 – 3:00 pm
(Keystone-ATS) The decrease is based on the formula established in a specific ordinance which provides for an adjustment in the event of a change in interest rates, explains the Federal Department of Justice and Police (DFJP) in a statement today.
The maximum rate serves to protect consumers: in fact the law on consumer credit declares contracts that provide for excessive interest null and void. A debtor affected by an invalid contract must repay only the amount already received or used, but is not required to pay interest or charges.
The maximum interest rate is based on the Saron, the reference rate in Switzerland, which in turn is influenced by the key rate of the Swiss National Bank (SNB). 10 (normal credits) and 12 (current account advances) percentage points are added to the Saron respectively; the values are then rounded.
The maximum rate is set for an indefinite period, but is checked at least once a year and adjusted if necessary. The last time it was adjusted was in November last year, with effect from January 1st this year: then it had increased by 1 percentage point, in the wake of the increase in market interest rates, today there has been a mirror opposite movement.
How might the connection between the maximum consumer credit interest rate and the Swiss Average Rate Overnight (Saron) impact borrowers who rely on fixed-rate loans, and what advice would you give them in this context?
## World Today News – Interview: Consumer Credit Interest Rates to Drop
**Host:** Welcome back to World Today News. Today, we’re diving into the recent news regarding a significant change in consumer credit interest rates in Switzerland.
Joining us to discuss this are two esteemed guests: [Guest 1 Name], a financial analyst with [Affiliation], and [Guest 2 Name], a consumer advocate with [Affiliation].
Welcome to both of you.
**Section 1: Understanding the Change**
**Host:** Let’s start with the basics. As this article states, the maximum interest rate for consumer credits in Switzerland will drop from January 1st, 2025. Could you both walk us through what this means for borrowers and lenders, and what prompted this change?
[Guest 1]
[Guest 2]
**Host:** This article mentions that the maximum interest rate is tied to the Swiss Average Rate Overnight (Saron). Could you explain how this connection works, and what factors might influence future adjustments to the Saron, and consequently the maximum interest rate?
[Guest 1]
[Guest 2]
**Section 2: Impact on Consumers**
**Host:** [Guest 2], from a consumer perspective, what are your thoughts on this interest rate reduction? How might this change impact individual borrowers, especially those with existing loans?
[Guest 2]
**Host:** [Guest 1], do you foresee any potential downsides to this reduction for borrowers or the broader economy?
[Guest 1]
**Host**: This article highlights the legal protections in place for consumers against excessive interest rates. Do you think these protections are sufficient, or should they be strengthened further?
[Guest 2]
**Section 3: Looking Ahead**
**Host:** Looking towards the future, what advice would you give to consumers regarding borrowing and managing debt in light of these changing interest rate dynamics?
[Guest 1]
[Guest 2]
**Host**: what are your thoughts on the overall trend of interest rates globally and how they might influence Swiss consumer credit in the long term?
[Guest 1]
[Guest 2]
**Host**: Thank you both for joining us today and providing such insightful perspectives on this important topic.
**(Closing remarks: Invite viewers to share their thoughts and engage in further discussion) **
