By Charlotte GAUCHON
22 March 2025
French legislation strictly regulates the cost of credit. It protects borrowers against excessive interest rates by means of a comprehensive repressive system, particularly with regard to usury. A loan becomes usurious when its total effective rate (TEG) is more than one-third higher than the average rate charged by credit institutions for similar transactions. This threshold varies according to the category of loan and is published quarterly in the Journal officiel. Criminal penalties Persons targeted Criminal penalties are not applied uniformly. The law of 1 August 2003 on economic initiative, supplemented by the law of 2 August 2005 in favour of SMEs, decriminalised usury for: Legal entities carrying on an industrial, commercial, craft, agricultural or non-commercial professional activity Natural persons acting for their professional needs The criminal penalties therefore apply only to: Usurious loans granted to private individuals not acting for professional needs Loans granted to private individuals acting for their professional...
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