Credit and consumer law
Failure to obtain a home loan: repayment of sums paid and penalties
By Charlotte GAUCHON25 June 2025The purchase of a property is often conditional on obtaining finance. French law has introduced a major protective mechanism for non-professional buyers: the condition precedent that the property loan must be obtained. This clause, incorporated into the promise to sell, renders the contract null and void if the loan is not granted. This is a fundamental provision for protecting borrowers on home loans. But what happens in practice if the loan is refused? What are the seller's obligations and what recourse do you have if the sums you have advanced are not returned to you? A lawyer who is an expert in mortgage law can help you assert your rights. The principle of full and immediate repayment When the condition precedent to obtaining a loan is not met, the law provides for a return to the previous situation. The preliminary contract (promesse or compromis de vente) is deemed not to have...
Export credits: issues and general framework
Export credit, Credit and consumer lawhtml In a context of fierce international competition, companies that export need appropriate financial solutions. Export credits are an essential lever for conquering foreign markets. They can be used to finance international commercial operations and secure transactions. Definition and economic context Export credits...Financial vs. operational leasing - Understanding the fundamental differences
Leasing, Credit and consumer lawIn asset financing, the distinction between financial and operational leasing raises decisive legal, accounting and tax issues. This differentiation determines how transactions are treated and structures contractual relations. Contrary to the traditionally narrow French view of leasing, the European approach reveals considerable complexity. Criteria for...European regulation of cross-border financial services
Leasing, Credit and consumer lawLeasing has become an essential financing tool in the European single market. Its cross-border dimension raises complex legal issues. This article analyses the regulatory framework for financial institutions operating across national borders. Freedom to provide services in the European Banking Directive...International leasing and the Ottawa Convention
Leasing, Credit and consumer lawCross-border financing requires appropriate legal frameworks. International leasing meets this need but creates areas of legal uncertainty. The Ottawa Convention attempts to remedy this. Definition and characteristics of international leasing A leasing transaction becomes international when the parties are governed by different legal systems. The contract...The components of the TEG: what is included and excluded
Credit and consumer law, Annual percentage rate of chargeUnderstanding the components of the Total Effective Rate (TEG) is essential for any borrower. This rate, which is used to compare the real cost of borrowing, includes much more than just interest. Certain costs are systematically included, while others are excluded. These distinctions can have significant financial and legal consequences....Informing borrowers of the TEG: legal obligations and issues
Credit and consumer law, Annual percentage rate of chargeCredit mechanisms are based on a natural imbalance between lender and borrower. The law attempts to correct this asymmetry by imposing strict obligations to provide information, particularly on the Total Effective Rate (TEG). Understanding these obligations protects your rights as a borrower and may, in certain situations, enable you to dispute charges...Penalties for errors or omissions in the TEG: developments in case law
Credit and consumer law, Annual percentage rate of chargeThe Total Effective Rate (TEG) is often at the heart of disputes between borrowers and banks. Case law has changed considerably in recent years, altering the balance between protecting borrowers and ensuring the legal certainty of loan contracts. Developments in civil penalties Historically, the courts declared the nullity of the clause...Usury in credit law: understanding and protecting yourself
Credit and consumer law, Annual percentage rate of chargeAny financial transaction can quickly fall into the trap of excessive interest rates. Alongside the TEG (Taux Effectif Global), usury constitutes a legal bulwark against abuse by lenders. But what exactly does this concept mean under French law? When does a rate become usurious? Who can claim usury? Legal definition...Penalties for loansharking: criminal and civil consequences
Credit and consumer law, Annual percentage rate of chargeFrench legislation strictly regulates the cost of credit. It protects borrowers against excessive rates by means of a comprehensive repressive system, particularly in terms of 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...The Total Effective Rate (TEG): definition and calculation methods
Credit and consumer law, Annual percentage rate of chargeCredit always costs more than the banks say it will. The nominal interest rate only reflects part of the reality. Hence the existence of the Taux Effectif Global (TEG), the cornerstone of banking transparency. This indicator, often unknown to borrowers, nevertheless plays a decisive role in comparing...Understanding the legal framework for home loans
Mortgages, Credit and consumer lawA house, a flat. For most people in France, buying a property is often the project of a lifetime. It is almost always financed by taking out a bank loan. Given the financial stakes involved and the length of the commitment, the legislator has gradually put in place a series of conditions...Term loans and life insurance
Credit and consumer lawFor a long time, the combination of a bullet loan and life insurance was presented as an ideal investment strategy. On the one hand, a loan for which you only repay the interest during the term of the loan, and on the other, an investment that is supposed to generate enough return to repay the capital at maturity. On the...Consumer credit disputes: deadlines and penalties
Consumer credit, Credit and consumer lawThe legal battle between borrowers and lenders is based on specific procedural rules. Consumer credit litigation is a special field, with its own deadlines, penalties and subtleties. The Protection Litigation Judge - formerly the Court of First Instance - has exclusive jurisdiction...Interest rates and TEG: understanding the protective rules
Consumer credit, Credit and consumer law``html Have you signed a credit contract but the real cost seems opaque? Borrowers are still unfamiliar with the legal protection afforded by interest rates. However, banks must comply with specific rules on transparency and information. Transparency of interest rates: protection against abuse The...Consumer credit guarantees: protecting the guarantor
Consumer credit, Credit and consumer lawHow many people have signed a guarantee without considering all the consequences? A guarantee is often a heavy commitment for the person who accepts it. In the field of consumer credit, this guarantee gives rise to a great deal of litigation. French legislation has gradually put in place protective mechanisms...Bank overdrafts and consumer credit law
Consumer credit, Credit and consumer lawThe bank overdraft, that red line that appears on your account, may seem simple on the surface. But when does it go from being a simple cash facility to consumer credit, with all the legal protections that implies? This article untangles the legal subtleties that govern...Revolving credit: precautions and legal framework
Consumer credit, Credit and consumer lawYou've probably noticed it in shopping centres: that tempting offer to "pay in instalments" or that shop card promising benefits. These schemes often conceal revolving credit, a financial instrument governed by strict regulations. Legislators have gradually tightened the safeguards around revolving credit.Earmarked loans: when the purchase and its financing are linked
Consumer credit, Credit and consumer law"I want to buy this kitchen on credit". A banal phrase, but one that conceals a complex legal reality: earmarked credit. Behind this commonplace transaction lies a special legal regime, a source of protection for consumers, but also of complications for those who do not master its subtleties. What is earmarked credit?The right of withdrawal: essential protection for borrowers
Consumer credit, Credit and consumer lawIn the world of consumer credit, the legislator has provided essential safeguards to protect consumers. Among these, the right of withdrawal is a bulwark against hasty commitments. Introduced by the Scrivener Act of 10 January 1978, this mechanism - also known as the right of repentance...Rules governing the formation of consumer credit agreements
Consumer credit, Credit and consumer lawConsumer credit contracts are subject to strict formalities. This legal framework is designed to protect consumers, who are often unprepared for the legal intricacies of these financial commitments. Why so many forms to sign? What rights does the borrower have? When is the contract definitively concluded? 1. The formalities...
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