Swiss Federal Council Cuts Covid-19 Loan Interest Rates to 0% & 0.5%

The Swiss Federal Council has decided to lower interest rates on Covid-19 loans, effective March 31, 2026. Borrowers with loans up to 500,000 Swiss francs will now pay no interest, while those with loans exceeding that amount will face a rate of 0.5 percent, according to a statement released Friday.

The decision to adjust interest rates annually by March 31st is mandated by the Covid-19 Solidarity Guarantee Law, the Federal Council noted. In making its determination, the government considers the benchmark interest rate of the Swiss National Bank (SNB), which has been at zero percent since the summer of 2025.

Previously, for a year prior to this decision, the interest rate for loans under 500,000 Swiss francs stood at 0.25 percent, and 0.75 percent for loans above that threshold. The Federal Council stated that the reduction reflects current market developments.

The lowered rates are intended to reduce financing costs for borrowers while still allowing banks to cover their refinancing costs, the government said. The Covid-19 credit program, launched in 2020, was designed to aid businesses overcome liquidity issues caused by the pandemic through state-guaranteed loans.

The Federal Council emphasized that Covid-19 loans should only be used for their intended purpose and that this is similarly in the interest of taxpayers. As of now, approximately 1.7 billion Swiss francs of the originally disbursed 16.9 billion francs remain outstanding, taking into account partial amortizations. These loans must be repaid by 2028, with extensions possible until 2030 in cases of hardship.

The Federal Council previously adjusted the rates on March 27, 2024, choosing to leave them unchanged at 1.5 percent for loans up to 500,000 francs and 2 percent for loans exceeding that amount. This decision followed a period where the SNB’s key interest rate was 1.5 percent.

On March 21, 2025, the Federal Council lowered the interest rates to 0.25 percent for loans up to 500,000 Swiss francs and 0.75 percent for loans exceeding that amount, following a reduction of the SNB key interest rate to 0.25 percent on March 20, 2025.