Consumer credit
Offering consumer credit, personal loans and buy-now-pay-later arrangements included, needs a lending licence or a banking licence under the Consumer Credit Directive (CCD2) Articles 2 and 3, alongside national law. Providers owe borrowers pre-contractual disclosure, a creditworthiness assessment and a statutory cooling-off right of withdrawal, wherever in the EU they lend.
Definition
Granting or promising credit to consumers, including buy-now-pay-later, subject to consumer protection rules on information, creditworthiness and withdrawal.
- CCD2, Art. 2-3: official text
Which licence you need
Licence families that typically permit this activity:
- Credit · Australia
Australian credit licence (ACL)
ASIC
- Credit · Czech Republic
Non-bank Consumer Credit Provider licence
CNB
- Credit · Estonia
Operating licence as a credit servicer
FI
- Credit · Estonia
Operating licence as a creditor
FI
- Credit · Estonia
Authorisation for operating as a financial institution
FIU
- Credit · Estonia
Operating licence as a credit intermediary
FI
- Credit · Poland
Lending Institution registration
KNF
- Credit · Spain
Specialized lending credit institution authorization
BdE
- Credit · United Kingdom
Consumer Credit Full Permission Authorisation (Part 4A FSMA)
FCA
Where it can be licensed
Frequently asked questions
Are buy-now-pay-later providers covered under consumer credit regulations?
Yes. The revised Consumer Credit Directive (CCD2) brings deferred payment and buy-now-pay-later services fully into scope. Providers have to assess creditworthiness, give standardised fee disclosures and keep repayment terms transparent, the same as any other consumer credit.
What happens if a lender fails to perform a creditworthiness assessment?
Consumer credit law requires the lender to check the borrower's ability to repay before granting the credit. Skip that check, and national enforcement statutes can respond with supervisory sanctions, an unenforceable loan agreement, or a cap on the interest charged.
Sources
- CCD2 Art. 2-3 · retrieved 2026-09-24
Planning consumer credit? Get the licence right first
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