Consumers will get more protection when they take out a loan thanks to new measures in the EU’s Consumer Credit Directive. The rules – which will help reduce costs and protect consumers from over-indebtedness - will apply across Europe as of 2026.

Why it’s important

The new rules are a much-needed step forward for consumers. Household budgets were put under increasing pressure during the cost-of-living crisis. Consumer groups from across Europe have reported that people have increasingly turned to services like ‘Buy Now Pay Later’ simply to keep up with their bills.

These risky financial solutions can needlessly send consumers into a spiral of financial problems. The new rules will offer consumers crucial extra protection to help avoid this kind of situation in the future.

For consumers, it means:

• Restrictions on lending if the credit-worthiness assessment is negative, to prevent pushing vulnerable consumers into over-indebtedness. National governments will also have to introduce measures preventing excessive costs for credit, e.g., cost caps.

• Loans below €200, leasing agreements or ‘Buy Now Pay Later’ schemes will be in the scope of the Directive. This was not the case before, leading to abusive practices from lenders.

• Those in financial difficulty will be offered supporting measures and be able to access debt advisory services.

What BEUC did

BEUC accompanied the legislative process from the very beginning, securing a good level of protection in the European Commission’s proposal. This was then further improved via intensive cooperation with various political groups in the European Parliament and several key EU Member States in Council.

BEUC members played a significant role in providing ample evidence on consumer problems when taking out a loan, particularly on newer products such as Buy Now Pay Later and leasing agreements.