Late payments on a loan or lease

You have taken out a loan or lease and you are falling behind in your monthly repayments? What are the consequences and penalties of this? Can some monthly repayments be deferred? When does the situation become serious? Can your partner be contacted by the bank?

When you take out a personal loan, you undertake to pay a given amount X each month over a given period of time. Countless unforeseen circumstances can bring your finances into the red, which will result in late payments for all or part of your bills.

3 scenarios may result from this with regard to your monthly loan or lease repayment:

1. Payment on the issue of a reminder
2. Reduced monthly payment
3. Late payment amount equal to 10% of the debt

1. Payment on the issue of a reminder

In the first scenario, you pay the monthly repayment of your loan or lease on receiving the reminder. After all, this is just another bill like any other and a late payment is a normal offence that has never been punished by anything more than administrative fees. You can’t image that a future lease or loan application would suffer from this?

And yet it can! The ZEK already considers this to be a serious breach that affects your confidence index. It will attribute a ZEK 03 code to you, which will stay on record for 5 years. Therefore, any future lease or loan applications within this lapse of time will most likely be refused.

This means that you should avoid all late payments as far as possible, whatever the cost! Except with Credit Now, which gives you the right to 2 pardons.

Penalties

What kinds of penalties are incurred: does this involve late interest or fixed costs?

With regard to late interest, the fixed fees begin at around 15 CHF and can reach up to 100 CHF! These amounts differ from bank to bank and are recorded in the general terms and conditions.

Exception with Credit Now

Credit-now allows you to defer your monthly repayments twice without charging additional interest and without a ZEK record.

Some banks provide this service under exceptional circumstances without consequences for the customer, however this is unofficial and relatively uncommon.

2. Reduced monthly payment

In the second scenario, your financial situation has changed and you can no longer repay your monthly payment amount. Consequently, you can ask your bank to reduce your monthly repayments.

A ZEK 04 code will be recorded and is more serious than the 03 code. It will also remain on record for 5 years.

3. Late payment amount equal to 10% of the debt

In the event of significant late payments reaching 10% of the net debt amount, the bank is entitled to claim the payment of the whole amount of the debt plus interest with immediate effect.

Generally, this type of procedure is conducted before a court. The customer will be required to immediately repay the full amount of the debt. If this is not possible, legal proceedings will be taken out against the customer.

If the person is married and the spouse is solvent, the bank can turn against the latter