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Consumer credit you have rights!

Consumer credit
you have rights!

Consumer credit
you have rights!

Consumer credit
you have rights!

  • The right to transparent credit advertising

    Finding it difficult to understand credit adverts?

    Advertising that shows the cost of the credit or interest rate must contain information to help you to compare offers and shop around for the best deal.

    This should include a representative example, giving you a clear and balanced view of the nature and costs of the credit.

  • The right to pre-contract information

    Shopping around to find the best credit offer for you?

    A credit provider is obliged to give you key information in good time before you sign a credit agreement.

    You should receive this information in a clear, standardised format called the Standard European Consumer Credit Information form (SECCI).

  • The right to clear information in the contract

    Need to check your credit agreement?

    You have the right to receive a copy of the credit agreement you have signed. The credit agreement must be written in clear and concise language. It must, among other things, state the details of the credit, the total amount owed and the Annual Percentage Rate of Charge (APR).

  • The right to change your mind

    Not sure whether the credit agreement you’ve signed is right for you?

    If you’re having second thoughts about the credit agreement you have signed, don’t forget that you can withdraw from the agreement within 14 days of signing. You will, of course, have to pay back the money you borrowed, plus interest and any non-refundable charges already paid by the credit provider.

  • The right to repay early

    Want to pay off your debt early?

    If you wish, you can repay your credit earlier than foreseen. However, you may have to compensate the credit provider for their lost income. But the compensation can’t exceed the total amount of interest you would have otherwise paid.

Test your consumer credit knowledge

1

You're considering a number of credit offers to finance a new TV and you see an advert indicating the cost of a particular offer.

What other information is the credit provider obliged to give you along with adverts containing figures, e.g. the interest rate?

Correct Answer

The borrowing rate and any charges as well as the total amount on offer.

Explanation

The borrowing rate (fixed or variable or both) together with particulars of any charges included and the total amount of credit on offer must be displayed clearly in any advertising containing figures.

2

You're in the market for a new fridge and you're going from shop to shop to see who's offering the best deal.

What kind of information are you entitled to receive at this stage?

Correct Answer

The Standard European Consumer Credit Information (SECCI) form.

Explanation

A credit provider is obliged to give you key information in good time before you sign a credit agreement. You should receive this information in a clear, standardised format called the Standard European Consumer Credit Information form (SECCI). Receiving the same form from each credit provider will allow you to easily compare offers and choose the best one for you.

3

You've settled on a new car and been offered credit to help you pay for it.

What key information must be included in the credit contract you are offered?

Correct Answer

Clear and concise details of the credit, the total amount you owe and the Annual Percentage Rate of Charge (APR)

Explanation

The key elements that must be written in any contract must normally include:

  • The type of credit;
  • The identity and geographical address of all the contracting parties (i.e. the creditor, the consumer and, if applicable, the credit intermediary);
  • The duration of the credit agreement;
  • The total amount of credit and the conditions governing the drawdown;
  • The cash price of the specific good or service if the credit is taking the form of a deferred payment and in the case of linked credits;
  • The borrowing rate, the conditions for the borrowing rate, the conditions governing the application of that rate and, where available, any index or reference rate applicable to the initial borrowing rate, as well as the periods, conditions and procedures for changing the borrowing rate and, if different borrowing rates apply in different circumstances, the abovementioned information in respect of all the applicable rates;
  • The annual percentage rate of charge and the total amount payable by the consumer, calculated at the time the credit agreement is concluded; all the assumptions used in order to calculate that rate shall be mentioned;
  • The amount, number and frequency of payments to be made by the consumer and, where appropriate, the order in which payments will be allocated to different outstanding balances charged at different borrowing rates for the purposes of reimbursement;
  • Where capital amortisation of a credit agreement with a fixed duration is involved, the right of the consumer to receive, on request and free of charge, at any time throughout the duration of the credit agreement, a statement of account in the form of an amortisation table;
  • If charges and interest are to be paid without capital amortisation, a statement showing the periods and conditions for the payment of the interest and of any associated recurrent and non-recurrent charges;
  • Where applicable, the charges for maintaining one or several accounts recording both payment transactions and drawdowns, unless the opening of an account is optional, together with the charges for using a means of payment for both payment transactions and drawdowns, and any other charges deriving from the credit agreement and the conditions under which those charges may be changed;
  • The interest rate applicable in the case of late payments as applicable at the time of the conclusion of the credit agreement and the arrangements for its adjustment and, where applicable, any charges payable for default;
  • A warning regarding the consequences of missing payments;
  • Where applicable, a statement, that notarial fees will be payable;
  • The sureties and insurance required, if any;
  • The existence or absence of a right of withdrawal, the period during which that right may be exercised and other conditions governing the exercise thereof, including information concerning the obligation of the consumer to pay the capital drawn down and the interest in accordance with Article 14(3)(b) and the amount of interest payable per day;
  • Information concerning the rights resulting from Article 15 as well as the conditions for the exercise of those rights;
  • The right of early repayment, the procedure for early repayment, as well as, where applicable, information concerning the creditor's right to compensation and the way in which that compensation will be determined;
  • The procedure to be followed in exercising the right of termination of the credit agreement;
  • Whether or not there is an out-of-court complaint and redress mechanism for the consumer and, if so, the methods for having access to it;
  • Where applicable, other contractual terms and conditions;
  • Where applicable, the name and address of the competent supervisory authority.

In the case of overdraft agreements only the following has to be specified:

  • The type of credit;
  • The identity and geographical address of all the contracting parties (i.e. the creditor, the consumer and, if applicable, the credit intermediary);
  • The duration of the credit agreement;
  • The total amount of credit and the conditions governing the drawdown;
  • The borrowing rate, the conditions governing the application of the borrowing rate and, where available, any index or reference rate applicable to the initial borrowing rate, as well as the periods, conditions and procedure for changing the borrowing rate and, if different borrowing rates apply in different circumstances, the abovementioned information in respect of all the applicable rates;
  • The annual percentage rate of charge (APR) and the total cost of the credit to the consumer, calculated at the time the credit agreement is concluded and information about the basis for this calculation;
  • An indication that the consumer may be requested to repay the amount of credit in full on demand at any time;
  • Conditions governing the exercise of the right of withdrawal from the credit agreement; and
  • Information concerning the charges applicable

The credit provider must ensure that this is presented in a clear, concise and easy-to-understand manner.

4

You've just bought a used car on credit but suddenly you realise that you won't need to take out credit after all.

Within how many calendar days of signing the credit agreement are you entitled to change your mind and withdraw?

Correct Answer

14 calendar days.

Explanation

If things change and you're having second thoughts about the credit agreement you have signed, don't forget that you can withdraw from the agreement within 14 calendar days of signing without explanation. You will just have to pay back the money you borrowed plus interest and any non-refundable charges already paid by the credit provider.

5

You've got that promotion you were hoping for and now you're interested in using that extra money to repay your credit early.

The compensation you're obliged to pay the credit provider cannot exceed...

Correct Answer

…the total amount of interest you would otherwise have paid

Explanation

You have the right to repay your credit early. However, you may have to compensate the credit provider for their lost income. The compensation you pay can’t exceed the total amount of interest you would otherwise have paid during the period of the contract.

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STOP
Be careful.

You need to check your rights once more before taking out credit.

Browse our website to find out more.

THINK
Not quite there yet.

You know a little but you should still proceed with caution and check your rights in more detail.

Browse our website to find out more.

ACT
Well done!

You seem to know the basics, however, we still advise you to check your rights.

Browse our website to find out more.

Try the quizz again

It can be fairly easy to buy a dishwasher, a package holiday or even a car on credit. The shop, the travel agent or the car dealer may offer you credit together with the contract.

It is very tempting to dive in feet first and accept such an offer. But don't just sign! You have rights that protect you or guarantee you a way out, should you need it. The credit provider also has to give you some basic information. This will help you to clearly understand what you’re considering signing and allows you to compare offers.

The information on these pages covers almost all types of consumer credit, from EUR 200 up to EUR 75 000. What is not covered is consumer credits:

  • secured by a mortgage;
  • concluded for the purchase of land or immovable property;
  • leasing or hiring agreements where there is no obligation to purchase;
  • granted free of interest, without other charges or in the form of an overdraft facility;
  • the result of a judicial ruling;
  • linked to the payment or surety of a debt; and
  • linked to loans granted to a limited group of the public.