A woman watches the inflation of the prices of her credit on her phone on her phone.
17.10.2022

Price inflation. Inflation of your credit too?

The economic world has been experiencing severe turbulence for some time. The Covid crisis, the supply chain that is still struggling, a war, soaring prices... How does this impact your credits?

 

The fight against inflation.

There are financial logics that are sometimes difficult to grasp; To the point that one can wonder about the effectiveness of certain measures. 

One trend that is global, however, is that of raising interest rates to combat soaring prices.

The United States was the first to react. This was followed by other countries around the world and the European Union. Switzerland is also following suit.

The mechanics behind a rate hike? 

The desire to reduce the easy access to liquidity that allows companies, as well as all of us, to invest in new projects, in infrastructure, in tools or software, in the latest smartphone... 

The central idea is to reverse the balance between supply and demand, between sales and purchases, in order to mechanically force down prices and bring competition back into play.

Does it work?

In principle, yes. The real issue is the timing of the impact. Experts agree that the effects will not be immediate. 

The result so far? A rise in prices and a rise in interest, all at the same time. If you add to this the effects of a context filled with macro-economic uncertainties and  the energy crisis, it gives a painful result for the average person to bear.

Fortunately, in Switzerland, inflation is more moderate than in our neighbours, especially in France. Inflation is at 6% compared to half in Switzerland. 

However, one variable that will impact our portfolio will be decisive, namely the cost of energy during the coming winter months.

 

Policy rates.

To better understand the issue of interest, it is the central banks of the countries that define the evolution of key rates. It is with this threshold in mind that financial institutions base their offers in terms of loans, credit facilities and mortgage loans.

Various rates exist, including  the Saron, but recently, all key rates have been rising and the time for negative rates is definitely over.

The SNB states that it is "counteracting the inflationary pressure, which has increased again, and is hindering its spread to goods and services that have so far been less affected by inflation." "Without the tightening of the screws, inflation would rise further," she said.

 

The first victims.

When it comes to outstanding loans, especially those taken out a few years ago and soon to mature, the first victims are likely to be the owners. For the first time in a very long time, it is now estimated that owning a home costs more than renting.

The math is simple. If you're paying 1% interest  on a million-dollar mortgage today,  it's perfectly plausible that you'll have to pay triple that if you take out a new loan on a new term, even five years, in 2023. 

From CHF 1,000 per month to be repaid, you will increase to CHF 3,000 per month. It hurts.

 

And your projects?

It all depends on the amounts involved and the type of project. Clearly, it's not the ideal time to take out a loan from your bank compared to two years or even a year ago.

As we are accustomed to recommending to our clients, an investment must be carefully considered. Your budget must be balanced and must take into account the costs incurred by borrowing. Term, interest rate, monthly payments and cash flow... Everything should be considered before signing your contract.

It is also essential to get advice from professional experts, people in the business who will take to heart to put together a healthy, complete credit file that respects your reality. This is especially useful for lower-income households that rely on credit to pay certain bills.

 

What about consumer credit?

If there is one financial sector that remains stable, it is the private credit sector. 

The maximum rate is defined and cannot be increased without the prior agreement of the authorities concerned. 

Competition continues to play its role as a regulator and this benefits people who still want to invest in a personal project or simply want to benefit from a breath of fresh air for their cash flow.

Useful because it is not linked to an approach that must be specified or justified, a consumer loan offers you the advantage of having funds that you can use as you see fit. 

Useful because you are able to repay your loan in full when you decide to do so, without constraint.

Useful because you receive a quick response with clear, transparent and law-compliant information on consumer credit.

 

Milenia, by your side.

Based in Switzerland, with a network of recognized partner banks, active throughout the country, benefiting from a team of experts dedicated to the principle of quality and referent in quality surveys, Milenia will be able to support you in your efforts.

No administrative burdens, truly personalized support and a welcome anchored in attentive listening to your needs... These are the commitments made by Milenia, a major player in the credit sector.

That's not all. 

Its financing platform allows you to simulate your credit by indicating the desired amount and the term. With just a few clicks, you have all the information you need and you can decide to be contacted by your personal advisor. 

In conclusion, stay ahead as the coming months are likely to shake up your payment habits and the amount of some of your bills. 

Remain cautious as it is important to avoid the context of over-indebtedness. 

On the other hand, if the conditions allow it, live your desires to the fullest and carry out your projects in complete freedom!

By opting for a personal loan, your financing can be done quickly, confidentially and, above all, taking into account your budget and the healthy limits that any qualitative credit must respect.

The word crisis seems to be part of our everyday jargon, but your life is worth living to the fullest. 

With this in mind, Milenia is at your side to support you in the realization of your projects!

 

 

 



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Telecommuting: flop or not?

Since the Covid pandemic, companies have multiplied remote working methods. The most widely used is telecommuting. Two years later, has this method been successful?

 

Let's take a step back

During the lockdown, the world of work experienced a real shift.

Companies had to adapt and various means were put in place to ensure the continuity of services, sales, and the very functioning of the organization.

Do you remember?

The famous cardboard box filled with a computer, a mouse and a screen that the employees took home...

We somehow settled down somewhere in our apartment or our house.

The less fortunate had to sit on an old table at the back of their bedroom.

Children screamed in the background and parents had to juggle their work responsibilities with those of being a mother or father.

Ah... What wonderful memories!

In addition, the schedules became confused. There was no beginning and no end. We were already connected before, but now the workplace had invited itself into our home, into the family, into our home.

However, not everything had to be thrown away.

The doctor's appointment, the receipt of the Zalando package, the visit of the plumber... What required us to take time off or organize ourselves differently simply fit into his work schedule, on site.

Above all, no more time wasted on the road or on the train. We earned two hours of our living every day. That's no small feat...

We weren't the only ones. Hundreds of millions of people around the world, by obligation or freely, switched to this new way of working.

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It was necessary to set up a teleworking policy to give directives on working hours, the availability of employees and managers so as not to be too intrusive in private life.

Finally, regular reviews were required to assess the effectiveness of telework policies and gather feedback from employees.

The big winners? Zoom, Teams, Skype, Webex... It was a good time and the number of users exploded

 

Video conferencing platforms

In order to establish clear and effective communication channels, it is necessary to have instant messaging and video conferencing tools to maintain smooth communication between team members. This transition is being made by different players who bring specificities specific to each sector.

You may have seen that.

Some companies will use the Zoom platform, which allows simple video conferences with a discussion thread, which is easy to use and not very connected to other services.

Others will use Microsoft Teams or Webex, which offer more integrated and secure business solutions.

Skype and Google Meet round out the market leaders, at least in Europe.

 

And what about employers?

The main fear of some employers during this pandemic?

Decreased productivity.

The prevailing thought was that employees, less supervised than before, would work less given this new organizational freedom.

The endless breaks, the last-minute shopping, the Netflix binging...

We're not going to lie, the majority of teleworkers have taken advantage of this to better combine professional and personal needs.

There have been many productivity studies, too many to mention here.

In the end, productivity dropped slightly on average, but this varied enormously depending on the functions and responsibilities.

Profiles whose tasks were recurrent completed their work more quickly and, not needing to do more, to take advantage of the time available to go about their personal business.

Others worked even harder, especially early in the morning, late at night, or on weekends.

Where some managers suffered from a lack of supervision (monitoring?) of their teams; Some employees did not take well to the distance, the lack of clarity on the establishment of rules... All of them missed interpersonal relationships and this may have impacted the corporate culture and sense of well-being.

In conclusion, there is neither one statistic valid for everyone nor a representative feeling of all employers and employees. However, there is no doubt that the world of work has changed and the effects continue today.

 

Exactly. And today?

Companies are adapting to the demands of employees, especially young people entering the workforce.

They demand flexibility, adapted schedules and, yes, telecommuting.

In Switzerland, the job market is in favour of job applicants. Companies must therefore remain attractive and take these demands into account.

Companies are implementing hybrid work modes that allow the employee more time to work from home but require them to be present for a certain number of days in the office. Again, there is no single rule.

Some organizations simply refuse the principle of remote work.

Others impose a fixed day of attendance.

Some leave the choice to their teams.

One thing is for sure, remote work is here to stay, in one form or another.

More than controlling productivity, more than managing teams and workloads, the real challenge is to keep the links between employees, to ensure proximity between managers and their teams.

Finding a balance between the attractiveness of the employer brand, individual well-being and the needs of the company; This is where the effort must be directed for the future.

 

At work and at home, Milenia is always available

Accessing credit through our financing platform has never been easier.

Everything is within your reach, with customization according to your projects, we accompany you from start to finish so that your projects can see the light of day.

For your personal loan, we offer the best market conditions with 0 application fees. Everything is designed to make your life easier.

Your loan application can be done entirely remotely, with support from your personal advisor or both at the same time.

The flexibility, adaptability, personalization of your offer... All of this is embedded in our approach and services.

As the leading credit player in Switzerland, place your trust in us so that your personal dreams and projects come true.

 

 

 

 

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Loan illustration: loan of CHF 10'000. Effective annual interests rates between 4.9% and 11.95% over a 12 month period lead to total interests of between CHF 261.80 and CHF 624.80. Duration: 6-120 months; Maximum annual interest rate (including all loan handling costs) 11.95%. Loans approval are prohibited if they lead to excess debt for the consumer. (Art. 3 LCD)

 

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