Prepayment penalties or precomputed interest for private loans

I had to take a private loan for 36 months from Credaris/Comparis.

I naively assumed that by paying it off sooner would save me some interest, so I ended up paying it off ~12 months earlier.

When I see the last bill - it seems I it doesn’t account for my over the minimum payments I’ve been making, I’m still waiting for the detailed breakdown to understand what happened.

I know I should’ve checked things before I made any assumptions, but somehow I was confident such scenario would be illegal.

Am I just naive and what happened is completely normal in Switzerland?

I suppose prepayment penalties might indeed be illegal under certain circumstances, but not the precomputed interest, which is what this seems to be about?

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Also understand where the money for your loan may have come from: Credaris probably borrowed money for 36 months from a bank or another lender and is owing interest to them. The only thing they can manage themselves is their own margin.

The Swiss consumer credit law is very clear that borrowers can make additional repayments on top of the required payments, or even repay the entire loan early, without any penalties. Interest can only be levied on the outstanding debt.

These requirements apply to Swiss personal loans between 500 and 80,000 francs with a loan term of 3 months or longer (12-month loans with quarterly repayments are exempted, don’t ask me why).

So that leaves us with these possible scenarios:

  • Your loan is over CHF 80k (or less than CHF 500)
  • Your loan has a term of less than 3 months, or 12 months with quarterly repayments
  • Credaris brokered you a loan from a foreign lender
  • The lender made a clerical error, and failed to recalculate your interest accounting for your extra payments.

This was not a consumer credit loan, was it? Who takes out consumer loans??? indeed, the loan is provided by RCI Finance (which also seemingly got renamed to Mobilize meanwhile), and yet - somehow they usually referred me to talk to Credaris.

@Daniel thanks, that’s reassuring, I believe none of the scenarios you described apply to me (although I am not really confident about the “foreign lender” one as there are indications RCI Finance / Mobilize has French roots, but that probably doesn’t matter here as I’ve been seemingly dealing with their CH entity), so will check if it might indeed be the “clerical error”.

@TeaGhost sorry for my ignorance, but what is a difference between a consumer credit loan & personal loan? I took the loan to help me pay for a foreign property, but this wasn’t for a mortgage as far as CH entities are concerned, though I did use it for real estate purchase.