Consumer credit or consumer loan is a loan between €200 and €75,000.

This type of loan concerns transactions other than those related to real estate.

The consumer loan allows in particular to buy consumer goods (furniture, household appliances...) or to have at the disposal of cash.

There are several forms of consumer credit: personal loan, earmarked credit, revolving credit etc.

You can take out a consumer credit from a credit institution, a financing business or their intermediaries (merchant, broker, etc.).

Advertising on consumer credit is regulated by law.

A credit institution that advertises a consumer loan must include the words "A credit commits you and must be repaid. Check your repayment capabilities before committing."

Where the consumer credit advertisement indicates an interest rate or numerical information related to the cost of the credit, the financial institution shall provide an example showing the following information:

• Debit rate, and precision on fixed, variable or revisable nature (except for hire purchase or hire purchase transactions)
• Information about all charges included in the total cost of the credit
• Total credit amount
• Annual percentage rate of charge (except for hire purchase or hire purchase transactions)
• Duration of the credit agreement
• The spot price and the amount of the advance payment, if it is a credit granted in the form of a payment period for a given good or service
• Total amount due by the borrower and maturity amount
• Clear, precise and visible indication of an ancillary service required by the financial institution for the granting of the credit (e.g. insurance).

If the credit institution offers or charges you insurance that guarantees repayment of the loan, it must provide you with detailed information on the cost of this insurance.

The detailed information shall include a quantified example showing the cost of insurance as follows:

• Annual effective rate of insurance, allowing easy comparison with the annual effective rate of credit
• Total amount due for insurance over the total duration of the loan, expressed in euro
• Amount due for the insurance per month, expressed in euro (whether or not this amount is added to the repayment maturity of the credit).

Where consumer credit advertising is in written form, the following information shall be presented in a larger size than that used for the rest of the text:

• Information on the annual percentage rate of charge and its fixed, variable or revisable nature
• Information on the total amount due by the borrower and the amount of the maturities
• A statement to the borrower that a loan commits the borrower, that the borrower must repay the loan, and that the borrower must check its ability to repay before making the loan commitment.

No consumer credit advertisement shall contain any of the following statements:

• The loan may be granted without information enabling the financial situation of the borrower to be assessed
• The loan improves the borrower's financial situation or budget
• The loan increases the borrower's resources
• The loan is a savings substitute
• The loan grants an automatic reserve of money immediately available without identifiable financial consideration
• The loan shall be subject to a period of non-repayment of maturities of more than 3.

A credit institution advertising a consumer loan shall not be entitled to offer promotional packages conditional on the acceptance of a prior offer of credit.

The procedure for granting consumer credit must begin with a maintenance during which the financial institution or intermediary must provide you with information and explanations on the loan, as well as verify your creditworthiness.

If the credit institution decides to grant you the loan, it must send you an offer of a credit agreement free of charge, by hand or by mail.

The credit agreement offer must be written on paper or in another durable medium.

It is a different document from the advertising documents and the pre-contractual information sheet.

It must contain the terms of the credit, with a box at the beginning that lists the essential characteristics of the credit.

The loan contract offer must be written in characters at least as high as the body 8.

It shall contain the following information in detail:

1. Identity and address of the creditor, the borrower and, if necessary, the credit intermediary
2. Box showing in large print the essential elements of the contract, namely:
   
   • Type of credit (earmarked credit, staff, renewable...)
   • Total amount of credit and conditions for making funds available
   • Duration of the credit agreement
   • Amount, number and frequency of maturities to be paid by the borrower
   • Borrowing rate and conditions applicable to that rate
   • Annual effective rate overalland the total amount due from the borrower, calculated at the time of the conclusion of the credit agreement
   • All charges related to the execution of the credit agreement
   • Collateral and insurance required, if necessary
   • Amount of notary fees, if necessary
   • If the credit is used to finance the purchase of a good or service, the description of the good or service and its spot price
3. Repayment Terms
4. Identity and address of possible guarantees
5. Conditions for acceptance or withdrawal of the credit agreement, namely:
   
   • Information on the conditions for concluding the contract
   • Reference to the existence of the right of withdrawal, the time limit and the conditions for exercising this right
   • Reference to the prohibition of payments and deposits between the creditor and the borrower for a period of 7 days from the acceptance of the contract by the borrower
   • In the case of an earmarked loan, the rights of the borrower and the conditions for exercising them
6. Information relating to the performance of the contract, including the following:
   
   • Conditions for early repayment, conditions and method of calculation of the early repayment allowance
   • Conditions for termination of the contract by the borrower
   • Reminder of the consequences of a borrower default
   • Indication of the compensation due in the event of late payment and the non-performance fees charged in the event of default, and the conditions for adjusting and calculating such compensation and fees
   • Reference to the borrower's right to receive a statement in the form of a depreciation table, on request and free of charge, at any time during the term of the contract (except for hire purchase and hire purchase)
7. Dispute handling information, including:
   
   • Presentation of the mediation procedure and its conditions of practice
   • Reference to the court competent for actions for payment against the defaulting borrower and the limitation period for such action
   • Details of the Supervisory Authority and the Directorate-General for Competition, Consumer Affairs and Fraud Prevention.

If you have a co-borrower or credit bond, the credit institution shall also provide them with a copy of the offer of the credit agreement.

The bank has the obligation to guarantee the conditions contained in the offer for a period of 15 free days from his delivery.

When the offer of a credit agreement is accompanied by an insurance proposal, the credit institution must provide you with a notice on paper or on another durable medium.

The package leaflet shall contain extracts from the general terms and conditions of the insurance, including the identity and contact details of the insurer, the duration of the contract, the risks covered and the risks not covered.

If the credit institution requires you to take out insurance in order to obtain the credit, the pre-contractual information sheet and the offer of the credit agreement must state that you have the possibility to take out equivalent insurance from another insurer.

If insurance is optional, the credit agreement offer must specify the procedure to be followed in order not to take out the insurance.

Where the credit is used to purchase property or a service, the total amount of the credit shall not exceed the credit value of the property purchased or the service provided.

There is an exception to this rule with respect to revolving credit agreements.

To accept your lender's offer, you must provide your lender with a copy of the credit agreement offer, dated and signed.

The credit agreement cannot apply immediately after you sign it, because there is a mandatory withdrawal period that is imposed on you and the credit institution.

The withdrawal period is a period during which you have the right to waive the credit without having to justify yourself to the credit institution.

The withdrawal period is 14 calendar days and the starting point for this period is the day on which you signed the credit agreement offer.

The credit institution must attach to the contract a detachable form to allow you to easily exercise your right of withdrawal.

If you waive the credit, this automatically results in the cancelation of contracts ancillary to the credit agreement, such as the insurance contract.

It is forbidden for the credit institution to record your details in a file following the exercise of your right of withdrawal.

During the withdrawal period, the credit institution or intermediary cannot claim any payment from you.

Once the withdrawal period is exceeded, you can no longer give up your acceptance of the offer of a credit agreement.

The credit institution must perform the contract, by making the funds available to you or by paying for the purchase of goods or the provision of services, at the time when the credit agreement is fully formed.

The consumer credit agreement becomes perfect when the following 2 conditions are met:

• You did not exercise your right of withdrawal within the deadline
• The credit institution has informed you of its agreement within 7 days calendar days after your acceptance.

If the credit institution has not sent you its agreement within the period of 7 working daysHowever, this means that your loan application has been refused.

But if you receive the agreement of the credit agency after the expiration of the 7 working days, you can benefit from the loan if you still want.

The credit institution's agreement to make the funds available to you after the expiry of the 7 working day period is also valid.

During the 7 working days following your signature of the credit agreement offer, the credit institution must not make any payments to you in connection with the loan transaction.

Likewise, the credit institution may not require any payment or deposit from you within this period.

But if you have purchased a earmarked credit (i.e. related to a specific purchase), and you make the request in writing, the seller may make the delivery of the good or the supply of service immediately or within a period shorter than 14 calendar days. We're talking about shortened period.

When the seller delivers the goods or the service within a short period of time, you can no longer exercise your right of withdrawal after the delivery or the service.

When the seller makes the delivery of the goods or the provision of services immediately, you can no longer exercise your right of withdrawal after the expiry of a period of 3 calendar days.

The credit institution may make the funds available to you after the expiry of the period of 7 working days that follows your signature of the credit agreement offer.

If you exercise your right of withdrawal after the funds have been made available, you must repay to the credit institution, at the latest within 30 days of sending your withdrawal.

In this case, you must also pay the accumulated interest on the funds paid to you, calculated from the date of receipt of the funds to the date of repayment.

You do not have to pay compensation in addition to interest to the credit institution.

The credit institution must inform you at least once a year, on paper or in another durable medium, of the amount of principal still to be repaid.

In the case of revolving credit, the information must be monthly and more complete.

In the event of a change in the borrowing rate, the borrower shall be informed on paper or on another durable medium before the change takes effect. This information shall indicate the amount of maturities after the entry into force of the new borrowing rate and, where appropriate, any change in the number or frequency of maturities.

Where the change in the borrowing rate results from a change in the reference rate, the new reference rate is made public by appropriate means and information on the new reference rate is also available at the premises of the creditor, the parties may agree in the credit agreement that this information shall be provided periodically to the borrower.

Before amending the terms of the credit agreement, the creditor shall provide the borrower with information on the proposed changes to the borrower's credit agreement, specifying those that require the borrower's consent, as well as information on the timetable for implementing the proposed changes and the procedures for making claims and mediating.

The list of information to be communicated to the borrower is fixed by decree in the Council of State.

Where insurance has been required by the lender and the borrower has taken out insurance with the insurer of his choice, the latter shall inform the lender of any substantial modification of the insurance contract.

The law requires credit institutions to be tolerant before initiating enforcement proceedings against a distressed borrower.

For example, in the event of payment difficulties, your credit institution should consider renegotiating the loan according to your personal situation, using one of the following measures:

• Total or partial refinancing of the credit agreement
• Extension of the duration of the credit agreement
• Total or partial suspension of monthly payments for a given period
• Change in interest rate
• Adjustment of the schedule (e.g. reduction of monthly payments)
• Partial debt relief and debt consolidation.

Starting on 1^er If you fail to pay, the financial institution has an obligation to inform you of the risks you incur if you fail to regularize the situation.

This information must be provided on paper or in another durable medium.

The financial institution may decide, despite your default, to temporarily pay the insurance contributions on your behalf, to allow you not to lose the benefit of the guarantees provided for in the contract.

If the credit institution has required you to take out insurance for the loan, and you have taken out this insurance with an external company, the insurer must inform the credit institution that your insurance premiums have not been paid.

When you default on the monthly installments, the credit institution has the right to demand the immediate repayment of the principal outstanding and interest overdue but not paid yet.

The principal amount outstanding shall earn interest for the credit institution at the rate of the loan between the date of the delay and the date of your payment.

If the credit is used to finance a lease agreement with a promise to sell or a lease-purchase agreement, the financial institution has the right to demand the return of the property and the payment of rent due but not yet paid.

In the 2 cases, the credit institution may also claim compensation from you to cover the damage caused by your default.

This allowance may not exceed 8% of the balance outstanding.

If the financial institution decides not to require immediate repayment of the outstanding principal, it may offer to renegotiate the loan according to your personal situation, through one of the following measures:

• Total or partial refinancing of the credit agreement
• Extension of the duration of the credit agreement
• Total or partial suspension of monthly payments for a given period
• Change in interest rate
• Adjustment of the schedule (e.g. reduction of monthly payments)
• Partial debt relief and debt consolidation.

You have the right to prepay the credit, if you wish.

The early repayment may relate to part or all of the outstanding amount.

If you make an early repayment, the credit institution must not count interest and fees that relate to the period for the early repayment.

When you prepay more than €10,000 during a period of 12 months, the credit institution has the right to claim an early repayment allowance from you.

The amount of the early repayment allowance shall be capped according to the period between the early repayment date and the end date of the credit agreement.

If you make the early repayment less than 1 year before the end of the credit agreement, the early repayment allowance is limited to 0.5% the amount of the credit.

If you prepay more than 1 year before the end of the credit agreement, the prepayment allowance is limited to 1% the amount of the credit.

In any case, the amount of the early repayment indemnity shall not exceed the amount of interest due for the period between the early repayment date and the end date of the credit agreement.

Upon early repayment, the credit institution is not entitled to claim any other compensation or expenses other than the early repayment allowance.

The early repayment allowance does not apply in the following cases:

• The credit that gives rise to the early repayment is an overdraft authorization
• The early repayment was made in fulfillment of an insurance contract intended to guarantee the repayment of the credit
• Early repayment occurs in a period where the borrowing rate is not a fixed rate.

The consumer credit agreement should specify how you will proceed if you wish to prepay the credit, as well as how the prepayment allowance is calculated.