Your rights with a consumer loan

Four rights determine what a loan really costs in the end. All four are set out in law, all four can be put into figures — and none of them appears in a rate comparison.

What you will find here

This section sets out the statutory entitlements under German consumer credit law and gives the legal provision for every statement. We quote the law rather than summarising it, so that you can look up each point yourself. This is general information and not legal advice. In a specific dispute with a lender, a consumer advice centre (Verbraucherzentrale) or a lawyer is the right place to turn.

• Withdrawal: 14 days — and when the period starts is the crucial point
• Early repayment: at any time, in full or in part
• Early repayment compensation: capped at 1 per cent
• Advertised example: expected for at least two thirds

Why the order matters

The rights apply at different moments. Before you sign, the two-thirds rule helps you put an advertising promise into perspective. Immediately after signing, withdrawal is what counts. And during the term, early repayment determines whether refinancing or a special repayment is worthwhile. If you know all four, you calculate differently — because the total cost of a loan is not fixed once you are allowed to pay it off early at any time.

What changes from 20 November 2026

Germany has transposed the EU Consumer Credit Directive (EU) 2023/2225 by the Act of 12 May 2026 (BGBl. 2026 I No. 139). Most of the changes apply from 20 November 2026. For contracts that existed before that date, the previous law continues to apply as a rule under Art. 229 § 71 (1) of the Introductory Act to the Civil Code (EGBGB). One exception concerns open-ended contracts such as an overdraft facility: the new rules on overdrafts (§§ 504, 504a and 505 (1) and (2) BGB), among others, also apply to them if they already existed. If the bank terminates an overdraft facility, it must then inform you at least 30 days before the termination takes effect. If you used the facility beforehand, it must offer you, before starting enforcement proceedings, to repay the amount used, to the extent of the termination, in twelve equal monthly instalments without additional costs (§ 504 (2) BGB).

For contracts concluded on or after 20 November 2026, the following applies, among other things:

• You declare withdrawal on paper or on another durable medium named in the contract; the right of withdrawal expires no later than twelve months and 14 days after conclusion of the contract if you were properly informed about it (§ 356b BGB)
• The lender may not make the loan conditional on buying other financial products or services (§ 492a BGB)
• The contract is void if the annual percentage rate is strikingly disproportionate to the market rate; this is generally the case if it exceeds the market rate by 100 per cent or by twelve percentage points (§ 492 (9) BGB)
• If you are in payment difficulties, the lender must refer you to debt advice services and, where appropriate, show reasonable forbearance before enforcement proceedings, for example by extending the term or deferring payments (§ 497a BGB)