Consumer credit
Offering consumer credit agreements, including personal loans and buy-now-pay-later arrangements, requires a lending licence or a banking licence under the Consumer Credit Directive (CCD2) Articles 2-3 and national law. Providers must comply with rigorous pre-contractual disclosure standards, mandatory creditworthiness assessments and statutory cooling-off right-of-withdrawal rules across member states.
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 (oprávnění k činnosti nebankovního poskytovatele spotřebitelského úvěru)
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 (Tegevusluba finantseerimisasutusena tegutsemiseks)
FIU
- Credit · Estonia
Operating licence as a credit intermediary
FI
- Credit · Poland
Lending Institution registration (instytucja pożyczkowa - RIP)
KNF
- Credit · Spain
Establecimiento financiero de crédito (EFC) / 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 arrangements and buy-now-pay-later services into full regulatory scope. Providers must assess consumer creditworthiness, provide standardised fee disclosures and ensure transparent repayment terms.
What happens if a lender fails to perform a creditworthiness assessment?
Under consumer credit legislation, lenders must evaluate the consumer's ability to repay before granting credit. Failure to perform adequate checks can result in supervisory sanctions, loan agreement unenforceability, or caps on interest charges under national enforcement statutes.
Sources
- CCD2 Art. 2-3 · retrieved 2026-09-24
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