The EU Council and the European Parliament have a new consumer credit agreement which will make looks to ensure that consumers can make an “informed choice” when applying for loans.

Replacing the current 2008 consumer credit agreements, the new directive stipulates that lenders must provide consumers with easy access to all necessary information and that they are informed about the total cost of the loan when signing a credit agreement.

The new law will also compel lenders must also to assess consumers' creditworthiness before granting loans to them.

The parties said that the new credit rules will now also apply to certain ‘risky loans’ that are excluded from the scope of the directive currently in force to keep up with digitalisation. These will include loans below €200, loans offered through crowd-lending platforms, and Buy Now, Pay Later products.

“Consumers can easily apply for credit online but might not always be well-informed on the consequences of this application,” said Jozef Síkela, Czech minister for industry and trade. “This agreement will ensure that citizens have sufficient and clear information about their credit agreements.”

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