Topic Consumer protection Loans & property financing
On the following pages you can find information on the various types of loans and on property financing. We explain where you need to be particularly careful if you wish to take out a loan or have already done so.
For loan agreements between a company as the lender and a consumer as the borrower, special statutory provisions normally apply. The provisions are intended to offer consumers special protection because banks generally have far more information at their disposal, which gives them an advantage over the consumer. For this reason, the lender must comply with certain rules. These include in particular:
- The loan agreement must be drawn up and signed in written form.
- The loan agreement must contain comprehensive minimum information, such as the net amount of the loan, the supervisory authority responsible for the lender, the method of repayment, the interest rate, other loan costs and the effective annual interest rate.
- The borrowers have 14 days within which to revoke the loan agreement if they wish.
- In the event of default on payment, the lender may only terminate the loan under certain conditions.
A borrower must be considered a consumer if the loan does not primarily serve as a basis for financing a commercial or a self-employed professional activity. There are general consumer loan agreements and property loan agreements for consumers.
However, the special protection provisions for consumer loans do not apply to all loans. Exceptions apply, for example, in the case of micro-, small- and short-term loans.
