What is a creditor and what do you need to know about creditors?


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If you want to invest in stone with a mortgage, you need to be familiar with the concept of a mortgagee. This is the party with whom you can take out your loan. You are bound to each other by a contract. Knowing your mutual obligations is absolutely essential before you take the plunge.

What is a creditor?

In the context of a debt, there are two parties: the creditor and the debtor. The debtor is the one who borrows a sum of money, while the creditor is the one who lends it.
The creditor can be a natural or legal person. This means it can be an individual lending money in his or her own name, or a structure such as a company.
With a mortgage, it is sometimes possible to borrow money from several banking organizations. You will then have several creditors.

Who can be a creditor?

Outside the mortgage framework, absolutely anyone can be someone's creditor. For example, you may choose to borrow money from someone close to you. He will therefore hold a claim and you a debt.
Money loans are generally made by banks, or approved lending organizations. In some cases, the money you need can be lent to you by a company or even an association.

What's the point of being a creditor?

Lending money can enable others to bring their projects to fruition. So you can choose to become a creditor, to help people around you.
When it comes to mortgagees, the claim generates financial interest. Indeed, when you take out a loan, it is offered to you together with an interest rate. This is the fee you'll have to pay in exchange for the loan you've been granted. It's a sum to be repaid in addition to the amortization of the capital made available.

Guarantees for mortgagees

In addition to the interest generated by the money loan, mortgagees generally take guarantees.


When it comes to analyzing your file, the use of equity capital can weigh in the balance. Indeed, the smaller the portion to be borrowed, the more certain the bank is that the sums owed will be repaid. Even if they are not used as direct collateral for the loan, they can considerably reassure the lending organization so that it will have confidence in you.

Mortgaging the property

The very principle of mortgaging is to pledge the purchased property as collateral. In other words, in the event of default, the bank can recover the property, to repay the remaining capital.
As a reminder, in Switzerland, the mortgage guarantee of the property only covers two-thirds of the transaction. Complementary solutions may therefore be useful to be able to take out this type of credit.


Loan insurance is not compulsory when you choose the mortgage formula. Nonetheless, this additional guarantee can help convince your bank. In fact, some organizations offer packages that include a contingency solution.
In particular, the insurance contract can guarantee repayment of outstanding capital in the event of the subscriber's death. This ensures you know that your loved ones will be able to benefit from your assets if something happens to you, without having to pay the remaining capital due. So it's also a way of protecting your loved ones.

The 3rd pillar

The 3rd pension pillar can also be used as collateral for your loan. It can help reassure lending organizations about your creditworthiness.

Solidary guarantor

Solidary guarantor is simply a guarantee by which a designated person indicates willingness to stand in for you, in the event of non-payment. The bank may accept a joint surety, but it must study the guarantor's file very carefully. His or her income or assets must be sufficient.

What happens in the event of non-payment

The terms of your contract

To know what will happen to your property in the event of non-payment, you need to refer to your contract. Traditionally, in the case of a mortgage, the property will be sold to enable repayment of the capital. If the sum is not sufficient to cover the amount due, you may need to call on other guarantees you have taken out. For example, it's possible that a joint and several guarantee made on part of the loan will be called upon.

Charges to be borne by the debtor

You may have to pay charges under your loan contract in the event of non-payment. Most of the time, these are borne by the debtor. You should therefore find out about the charges incurred in the event of default.
If the unpaid amount results in legal proceedings, the debtor is also liable for the costs incurred, in accordance with Swiss law.

How to choose your mortgage lender

Services and values

To choose who you borrow money from for your mortgage, you can first take a look at the services offered by the bank. For more and more individuals, for example, it's essential to be able to carry out certain operations online.
The values defended by the lending organization can also be at the heart of our concerns. If ecology is a cause to which you wish to commit yourself, you should know that some banks offer suitable products.

Rates and options

When banks formulate loan offers, it's often the rates at which you're offered credit that guide your choice. In fact, from one offer to another, you can make considerable savings. Our advice is always to compare offers with equal guarantees and options.

The support of an advisor

To get a clearer picture of the role of mortgage creditors and to choose your own, calling on an advisor is useful. He or she can give you the full benefit of his or her network and in-depth knowledge of the market, to find the best interlocutors. You'll also be able to put together an optimal financial package, for a well-crafted investment.
Valery Chantepy
Updated on: 31.01.2024Written by Valery ChantepyHead of mortgage department at Comparea
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