Unable to pay your loan instalment: what to do
Act early when a loan payment becomes difficult: review your budget, speak to your lender and check where independent advice can help.
Updated on · Budgetcredit
Act early and explain the full situation
If you expect to be unable to pay a loan instalment, contact the lender before its due date if possible. Briefly explain the cause, how long you expect the problem to last and what you can realistically afford. An early enquiry does not guarantee a particular solution, but it provides a better starting point than silence or repeated promises you cannot keep.
At the same time, review your entire budget. A single missed payment caused by an administrative problem calls for a different response from a lasting fall in income. Distinguishing between these causes helps you take more appropriate action. Taking out another loan to cover an existing instalment should not be an automatic response if it merely postpones a growing debt.
Organise income, essential costs and debts
Write down available income, bills due and all commitments. Include annual bills and any arrears already incurred. Mark which expenses are necessary for everyday living. If you have several creditors, independent advice can help you set appropriate priorities.
A simple budget sheet with actual amounts is more useful than an optimistic estimate. If income has been lost, do not continue calculating with your previous salary unchanged. If a payment is simply expected late, record when it is due and how reliable it is. A hoped-for extra payment is not guaranteed income.
Approach the conversation with a concrete proposal
- Which instalment is affected and when is it due?
- What has changed in your financial situation?
- Is the problem temporary or likely to last longer?
- What amount is actually available after essential expenses?
- What documents can you provide to show the change?
Ask about the contractual solutions available and their consequences. A deferral, an adjustment or another arrangement may involve additional costs or a longer commitment. There is no general entitlement to take a payment break whenever you choose. Obtain written confirmation of any agreement actually reached.
Until then, a new payment schedule does not automatically apply. Sending an email or starting a discussion does not yet constitute an accepted contract amendment. Clarify explicitly which payment is expected and by when. Keep the correspondence and all confirmations.
Check existing insurance cover carefully
If you have taken out payment protection insurance, read the policy and the conditions relating to the event that has occurred. Depending on the product, incapacity for work or involuntary unemployment may be covered, but exclusions, waiting periods and benefit limits remain crucial. Insurance does not automatically cover every instalment during every financial shortfall.
Report a potential insurance claim promptly through the specified channel and submit the required evidence. Do not assume that reporting a claim already means benefits have been approved. Clarify with the lender and insurer how ongoing payments will be handled until a decision is made. The article Protecting your loan explains the main limitations.
Take arrears seriously without jumping to conclusions
Missed payments can trigger reminders, consequences of default and further action. For contracts within its scope, Art. 18 of the Consumer Credit Act (KKG) sets out, among other things, the conditions for the lender to terminate the contract and a limit on default interest. This does not create a free grace period during which agreed instalments may be suspended at will.
Data reporting and subsequent credit assessments may also become relevant. Ask about the specific situation instead of assuming every consequence from a single letter. If a claim or additional costs are disputed, obtain qualified clarification. In particular, do not ignore official letters and their deadlines.
When independent help makes sense
If several payments are being missed, essential living costs are not covered or there is no realistic prospect of repayment, contact a recognised debt advice service. Schuldenberatung Schweiz lists specialist services by region. Advice can help you organise documents and assess sustainable next steps.
Prepare salary and benefit statements, rental costs, insurance policies, tax documents and a list of all creditors. You do not need to have solved the situation completely before seeking support. The sooner the full picture becomes clear, the less time is lost on unsuitable isolated measures.
Make a new plan once the situation has stabilised
Any subsequent financing should only be assessed on the basis of an updated, reliable budget. Reviewing insufficient financing capacity can offer guidance here. However, it does not replace a solution for existing arrears.
Avoid offers promising a guaranteed payout in return for an advance payment or without an assessment. A simple answer can seem particularly tempting under pressure. What helps instead is a documented plan combining essential expenses, realistic payments and the actual contractual terms.
Frequently asked questions
Am I automatically entitled to a payment break?
No. A change must be discussed with the lender and agreed in a binding arrangement.
Does payment protection insurance cover every shortfall?
No. The insured event, exclusions and other conditions determine the cover.
When should I contact a debt advice service?
At the latest when several payments are at risk or your budget does not balance over the longer term. Early advice can make the next steps easier.
Sources and date
As at 13 October 2026. The applicable rules, individual assessment and contractual documents are decisive.
Lending is prohibited if it leads to over-indebtedness. A budget calculation is a non-binding indication and is not a credit offer.
