Asking for a loan will be safer in the EU after the Council’s final approval of the Consumer Credit

The Council has adopted the consumer credit directive, which aims to enhance the protection for European consumers applying for credit.

The revised legislation repeals and replaces the current 2008 directive on consumer credit agreements.

While the digital transition facilitates access to credit, we need to protect consumers from irresponsible lending practices that spread particularly in online environments. This new legislation will ensure that consumers have all the information they need, and that it is presented clearly, even for small-scale credit.

Alberto Garzón Espinosa, Spanish Acting Minister for Consumer Affairs

The directive adopted today:

• ensures that credit information, such as the total cost of credit is presented in a clear and understandable manner and is adapted to digital devices
• establishes stricter advertising rules to reduce abusive credit to over-indebted consumers and creates effective measures against overcharge
• requires lenders to assess whether consumers can repay their credit, so that they are protected from over-indebtedness
• enlarges the scope of the directive to loans below €200 and buy-now-pay-later products
• gives consumers the right to terminate a credit agreement within 14 days, and gives cancer survivors the right to be forgotten

Next steps

Following the Council’s approval today of the provisional agreement, the legislative act has been adopted.

After being signed by the President of the European Parliament and the President of the Council, the directive will be published in the Official Journal of the European Union and will enter into force on the twentieth day following its publication.