Consumer Credit Directive, Duty to Assess the Consumer's Creditworthiness Before Lending (Article 18)

Article 18(1) requires Member States to require the creditor, before concluding a credit agreement, to carry out a thorough assessment of the consumer's creditworthiness. Article 18(1) provides that the assessment must be carried out in the interest of the consumer, to prevent irresponsible lending practices and over-indebtedness, and must take appropriate account of factors relevant to verifying the prospect of the consumer meeting his or her obligations under the credit agreement.

Article 18(2) requires Member States to ensure that credit intermediaries accurately submit the necessary information obtained from the consumer to the relevant creditor, in accordance with Regulation (EU) 2016/679, to enable the creditworthiness assessment to be carried out.

Article 18(3), second sentence, provides that the information for the assessment may include evidence of income or other sources of repayment, information on financial assets and liabilities, or information on other financial commitments. Article 18(3), fourth sentence, provides that the information is obtained from relevant internal or external sources, including the consumer and, where necessary, on the basis of a consultation of a database referred to in Article 19.

Article 18(3), last sentence, provides that the information obtained must be appropriately verified, where necessary through reference to independently verifiable documentation. Article 18(4) requires Member States to require the creditor to establish procedures for the assessment and to document and maintain those procedures. Article 18(4) also requires Member States to require the creditor to document and maintain the information referred to in paragraph 3.

Article 18(5) provides that, if the credit application is submitted jointly by more than one consumer, the creditor performs the creditworthiness assessment on the basis of the joint repayment capacity of the consumers.

Article 18(6) requires Member States to ensure that the creditor only makes the credit available to the consumer where the result of the creditworthiness assessment indicates that the obligations resulting from the credit agreement are likely to be met in the manner required under that agreement, taking into account the relevant factors referred to in paragraph 1.

Article 18(7), first sentence, requires Member States to ensure that a creditor that concludes a credit agreement does not subsequently cancel or modify the agreement to the detriment of the consumer on the grounds that the assessment of creditworthiness was incorrectly conducted. Article 18(7), second sentence, provides that the paragraph does not apply where it is demonstrated that the consumer knowingly withheld or falsified the information referred to in paragraph 3 provided to the creditor.

Article 18(9), first sentence, requires Member States to ensure that, where the credit application is rejected, the creditor is required to inform the consumer without delay of the rejection and, where relevant, to refer the consumer to easily accessible debt advisory services.

Article 18(10) requires Member States to ensure that, where the parties agree to change the total amount of credit after the conclusion of the credit agreement, the creditor is required to reassess the consumer's creditworthiness on the basis of updated information before any significant increase in the total amount of credit is granted.

Article 18(11), first sentence, allows Member States to require creditors to assess the creditworthiness of consumers on the basis of a consultation of the relevant database. Article 18(11), second sentence, provides that the assessment of creditworthiness shall not be based exclusively on the consumer's credit history.

Article 42(1) provides that, insofar as the Directive contains harmonized provisions, Member States may not maintain or introduce in their national law provisions diverging from those laid down in the Directive unless provided otherwise in the Directive.

Article 3, point (2), defines a creditor as a natural or legal person who grants or promises to grant credit in the course of that person's trade, business or profession. Article 3, point (1), defines a consumer as a natural person who acts for purposes which are outside his or her trade, business or profession.

Article 3, point (12), defines a credit intermediary as a natural or legal person that is not acting as a creditor or notary and not merely introducing a consumer to a creditor, and who, in the course of that person's trade, business or profession and for remuneration, presents or offers credit agreements to consumers, assists consumers by undertaking preparatory work or other pre-contractual administration in respect of credit agreements other than presenting or offering them, or concludes credit agreements with consumers on behalf of the creditor.

Article 2(1) provides that the Directive applies to credit agreements. Article 2(2), point (a), excludes from the Directive credit agreements secured by a mortgage, or by another comparable security commonly used in a Member State on immovable property, or secured by a right related to immovable property. Article 2(2), point (c), excludes from the Directive credit agreements involving a total amount of credit of more than EUR 100,000.

Article 2(3) applies the Directive to a credit agreement of more than EUR 100,000 that is not secured by a mortgage, by another comparable security on immovable property or by a right related to immovable property, where its purpose is the renovation of a residential immovable property.

Article 2(2), point (h), excludes from the Directive deferred payments whereby a supplier of goods or a provider of services, without a third party offering credit, gives the consumer time to pay, the purchase price is to be paid free of interest and without any other charges and with only limited charges payable by the consumer for late payments imposed in accordance with national law, and the payment is to be entirely executed within 50 days of the delivery of the good or service.

The second subparagraph of Article 2(2), point (h), provides that, for deferred payments offered by a supplier or provider that is not a micro, small or medium-sized enterprise and offers information society services consisting of the conclusion of distance contracts with consumers, the exclusion applies only where a third party is neither offering nor purchasing credit, the payment is to be entirely executed within 14 days of the delivery of the goods or services, and the purchase price is to be paid free of interest and without any other charges and with only limited charges for late payments.

Article 2(2), point (l), excludes from the Directive credit agreements existing on 20 November 2026, but Articles 23 and 24, Article 25(1), second sentence, Article 25(2) and Articles 28 and 39 apply to all open-end credit agreements existing on that date. Article 2(4) provides that, for credit agreements in the form of overrunning, Article 18 applies unless otherwise determined by Member States.

Article 2(6) allows Member States to determine that only the Articles it lists, which do not include Article 18, apply to credit agreements concluded by an organization whose membership is restricted to persons residing or employed in a particular location, to employees and retired employees of a particular employer, or to persons meeting other qualifications laid down under national law as the basis for a common bond between the members, where the organization meets the conditions in points (a) to (e).

Article 2(7) allows Member States to determine that only the Articles it lists, which do not include Article 18, apply to credit agreements between the creditor and the consumer in respect of deferred payment or of repayment methods, where the consumer is already in default or is likely to default on the initial credit agreement and the conditions in points (a) and (b) are fulfilled.

Article 44(1) requires Member States to lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to the Directive, and provides that the penalties must be effective, proportionate and dissuasive.

Article 40(1) requires Member States to ensure that consumers have access to adequate, prompt and effective out-of-court dispute resolution procedures for the settlement of disputes between consumers and creditors or credit intermediaries concerning rights and obligations relating to credit agreements established under the Directive.

Article 47 repeals Directive 2008/48/EC with effect from 20 November 2026, and provides that Directive 2008/48/EC continues to apply to credit agreements existing on 20 November 2026 until their termination. Article 48(1) requires Member States to adopt and publish by 20 November 2025 the laws, regulations and administrative provisions necessary to comply with the Directive, and to apply those measures from 20 November 2026.