Consumer credit: contract rules
Verified 25 May 2021 - Directorate for Legal and Administrative Information (Prime Minister)
Consumer credit must be provided through a contract. Before the contract is signed, the lender must check your creditworthiness and inform you of the content of your commitments. The contract is concluded by the signature of the loan offer, but it does not become effective until after the expiry of the withdrawal period. After the contract comes into effect, the lender must periodically inform you of the principal outstanding.
A consumer credit agreement must start with a maintenance during which the lending institution (bank, credit institution...) must inform you and check your creditworthiness. Your creditworthiness is your financial ability to repay the credit.
At that time, the lender must provide you with a standardized pre-contractual fiche. This card shows the important elements of the loan, including the total cost of the loan, the amount of the monthly installments and the interest rate charged.
At the end of the pre-interview, the lender must send you the credit agreement offer in person or by mail.
The credit agreement offer reminds you of the terms of the credit offered to you. These are the conditions that will be applied if you sign the contract.
If you have a security for this loan, it must also obtain a copy of that offer.
The lender must guarantee you the terms contained in the offer for 15 free days from his delivery.
The contract offer must specify the following details:
- Identity and address of lender and borrower
- Type of credit (earmarked credit, staff, renewable...)
- Credit amount
- Conditions for making funds available
- Duration of contract
- Amount, number and frequency of maturities
- Annual percentage rate of charge (APR) and the total amount payable by the borrower, except where the borrower revolving credit
- Identity and address of possible guarantees
- Existence of the right of withdrawal
- Ways to repay the credit in advance and ways to terminate it
- Address of the Supervisory Authority for Supervision and Resolution (ACPR), responsible for supervising banks
- Address of local competition and fraud enforcement services
your lender may also require insurance on the contract. This guarantees that he will be reimbursed in case you become ill or die.
To accept your lender's offer, you must give them a copy of the contract, dated and signed. But this signature does not mean that you permanently accept the credit.
The date of this signature marks the beginning of your withdrawal period, which is 14 calendar days. During that time, you can reconsider your decision. The procedure to be followed in order to renounce the contract must be indicated in the contract. A release waybill must be attached. On his back, you have to find the name and address of the lender to send him back to.
During the withdrawal period, no payment can be claimed from you by the lender. The lender can make part of the borrowed money available to you, but is not obliged to do so.
In the case of a earmarked credit (i.e. linked to a specific purchase), the time limit may be reduced under certain conditions, in particular if the delivery of the goods is immediate.
Once the withdrawal period is exceeded, the contract is considered as definitively accepted.
if you exercise your right of withdrawal after having received part of the funds, you will have to repay them to the lender and pay the interest on this capital since the date the credit was paid to you. However, you will not have to pay him termination fees.
The contract is definitively accepted and can be applied as soon as the withdrawal period has expired. You start repaying the credit on that date.
Making funds available
We have to wait 14 free days after the final acceptance of the contract, i.e. after the end of the withdrawal period, in order to be able to pay the funds.
Delivery of goods or performance of services
If you have purchased a earmarked credit (i.e. linked to a specific purchase), the seller must not deliver the goods or start the service before the end of the withdrawal period.
However, if you request it in writing, the seller can make the delivery of the goods or the supply of services 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 lender must inform you at least once a year of the amount of principal outstanding.
In the case of revolving credit, the information must be monthly and more complete.
Difficulties in repayment
Starting on 1er If you have a payment incident, the lender must inform you of the risks you incur.
If you cannot pay your monthly credit repayment, the lender can demand immediate repayment of the principal outstanding, with interest due. They may also claim compensation from you to cover the damage they have suffered.
The lender can grant you a term extension, at most twice a year.
In the event of temporary financial difficulty or a lasting drop in your income, the lender may also grant you, subject to conditions, a deferral of part or all of one or more monthly installments.
The end of the credit agreement must be provided for in the contract. This is the date on which you must have finished repaying the credit.
The contract must also specify how and under what conditions you must do so if you wish to prepay the credit, including how the prepayment allowance is calculated.