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Consumer credit agreements

The increased availability of credit in Europe must be accompanied by a strengthening of consumer rights. Harmonisation of national provisions must also encourage cross-border credit availability.


Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC.


This Directive aims to harmonise the laws, regulations and administrative provisions of the Member States covering credit for consumers, in order to facilitate cross-border services. It shall increase the transparency of contractual conditions and improve the level of consumer protection.

However the Directive is not applicable to credit agreements that are:

  • secured by a mortgage;
  • concluded for the purchase of land or immovable property;
  • whose total amount is less than 200 euros or more than 75 000 euros;
  • relating to lease or hire where there is no obligation to purchase;
  • granted free of interest, without other charges or in the form of an overdraft facility;
  • concluded with an investment company;
  • the result of a judicial ruling;
  • linked to the payment or to the surety of a debt;
  • linked to loans granted to a limited group of the public.

Member States may also apply a less restrictive regime to organisations with social aims and activities that only profit their members, where they offer an annual percentage rate of charge which is lower than the current market rate.

During the pre-contractual phase,the creditor * or their intermediaries * must supply clear information on the main features of the credit offered in due course. In particular, this concerns:

  • the duration of the credit agreement;
  • the total amount of credit;
  • the borrowing rate and rates relating thereto;
  • the annual percentage rate of charge * and the total amount owed by the consumer *;
  • the amount, number and frequency of instalments;
  • the cash price for goods or services supplied against specific payment terms or a linked credit agreement;
  • costs linked to or resulting from the agreement;
  • contractual obligations;
  • consumer rights;
  • the consequences of late payments and defaults;
  • sureties.

Consumers shall receive this information in a standard form as stipulated in Annexe II of the Directive.

Apart from an obligation to supply comprehensive pre-contractual information, creditors must supply consumers with adequate explanations so that the latter may choose a contract which corresponds to their needs and to their financial situation. In addition creditors must evaluate the solvency of their clients before concluding an agreement, whilst also respecting the right of consumers to be informed when their request for credit is rejected.

The contract must restate the main information relating to the credit offer chosen. If the borrowing rate is modified *, the consumer must be informed of the new amount, the number and frequency of instalments.

Consumers may exercise their right to withdraw by notifying the creditor of their intention, without having to justify their decision. This must take place within fourteen days from the conclusion of the agreement.

Consumers also have the right to make early repayment of their debt. They can exercise this right at any time, as long as the creditor receives fair compensation which is objectively justified.

Member States shall ensure that creditors and credit intermediaries fulfil their obligations. They shall ensure that audits are carried out by an independent authority.


This Directive repeals Directive 87/102/EEC in order to strengthen consumer protection. It must be implemented in Member States before 2 May 2010.

Key terms of the Act
  • Creditor: any natural or legal person who grants or promises to grant credit in the course of their trade, business or profession.
  • Credit intermediary: a natural or legal person who does not act as a creditor and who, in the course of their trade, business or profession:
    1. presents or offers credit agreements to consumers;
    2. assists consumers by carrying out preparatory work for agreements;
    3. concludes credit agreements with consumers on behalf of the creditor.
  • Total amount payable by the consumer: the sum of the total amount of the credit and the total cost of the credit to the consumer.
  • Annual percentage rate of charge: the total cost of the credit to the consumer, expressed as an annual percentage of the total amount of credit.
  • Borrowing rate: the interest rate expressed as a fixed or variable percentage applied on an annual basis to the amount of credit drawn down.


ActEntry into forceDeadline for transposition into the Member StatesOfficial Journal

Directive 2008/48/EC



L 133/66 of 22.5.2008

Last updated: 22.01.2009

See also

  • For further information please consult the website of the European Commission’s Directorate General for Health and Consumers
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