Consumer credit law in France

Financing a car, a laptop, renovation work: consumer credit has become so commonplace that nearly one-third of French households hold at least one such agreement. Behind this banality lies one of the most stringent regimes in French private law. Since the Scrivener Act of 1978, the legislature has patiently constructed a body of mandatory rules that trusts neither the freely negotiated contract nor the consumer’s ability to defend themselves unaided. The Consumer Code imposes a public-policy formalism on lenders, grants borrowers rights they often do not know they have, and entrusts the consumer protection judge (juge des contentieux de la protection) with resolving disputes under derogatory rules – a two-year time bar, the power to raise issues of its own motion, and a power to modulate sanctions. The 2008 European maximum harmonisation directive, transposed by the Lagarde Act, reinforced this framework by establishing common obligations across the EU. The framework is changing again, with a revised directive entering into force on 20 November 2026. This guide sets out the state of the law at that pivotal date.

Definition and scope

Consumer credit is not merely a loan of money. It is a legal category constructed by the legislature to distinguish financing transactions involving individuals that merit the enhanced protection of the Consumer Code from those subject to the general law of lending. The boundary rests on three cumulative criteria: the capacity of the parties, the purpose of the funds, and the amount of the transaction.

Article L. 313-1 of the Monetary and Financial Code defines a credit transaction as “any act by which a person, acting for consideration, makes or promises to make funds available to another, or undertakes a commitment by signature such as an aval, a surety, or a guarantee.” Consumer credit is a subcategory of this general definition, subject to its own distinct regime.

The Consumer Code regime

Article L. 311-1, 6° of the Consumer Code defines a credit agreement as “the transaction or agreement by which a lender grants or undertakes to grant a consumer credit, in the form of a deferred payment, a loan, including by way of overdraft, or any other similar payment facility.” This definition is deliberately broad: it captures not only the conventional personal loan, but also overdrafts, hire-purchase, recurring credit facilities, and card-linked credit.

The protective regime then unfolds across Articles L. 312-1 to L. 312-95 of the Consumer Code, forming the core of the subject. These provisions are of public policy: the parties may not derogate from them, even by express agreement. The Cour de cassation has consistently affirmed this, notably in a ruling of 17 June 2009: “the public-policy rules of the Consumer Code cannot be circumvented.” Any contrary contractual clause is deemed unwritten, and the court has the power to raise its irregularity of its own motion.

Thresholds: EUR 200 to EUR 75,000, over three months

The regime does not apply to all credit. Article L. 312-4 of the Consumer Code sets a floor and a ceiling. Transactions below EUR 200 fall outside the protection: the legislature considered that at this level, deploying a heavy formalistic apparatus would be disproportionate. At the other end, the ceiling of EUR 75,000, set by the transposition ordinance of 2008, marks the boundary with mortgage credit, which has its own regime. This ceiling was supposed to be revalued every five years; it has not been since its introduction, causing a silent drift in the scope of application as inflation erodes the real value of the threshold.

Duration also matters. Credits repayable in less than three months without charges, and overdrafts repayable within one month, are excluded by Article L. 312-4. This exclusion aims to leave ordinary banking facilities – grace periods, standard debit interest – outside the law. In practice, the boundary is sometimes thin: a tolerated overdraft that continues beyond one month without bank intervention may fall within the protective regime.

Excluded transactions

Beyond the thresholds, Article L. 312-4 excludes several categories: credit financing a professional activity (even if taken out by an individual, where the purpose is professional), mortgage credit subject to Articles L. 313-1 et seq., fixed-term rentals without a purchase option, and sureties and guarantees. Case law interprets these exclusions strictly: where there is doubt about classification, the court applies the protective regime rather than excluding it, in line with the spirit of the European maximum harmonisation directive.

Types of consumer credit

Behind the generic category lie several distinct instruments, each subject to specific rules on top of the common base. Distinguishing them is not academic: the nature of the credit determines the scope of the borrower’s rights and, above all, the sanctions applicable when the lender defaults.

The personal loan (unlinked credit)

This is the basic form. The lender makes a fixed sum available, repayable on a fixed schedule, without the borrower having to justify the use of funds. The freedom of allocation has a cost: the personal loan does not benefit from the interdependence mechanism that characterises linked credit. If the borrower uses the funds to purchase a defective item, the dispute with the seller does not affect the loan agreement. The two contracts live independently, which can be unfavourable to the borrower facing a commercial dispute.

Linked credit (tied credit)

Linked credit is dedicated to financing a specific good or service identified in the agreement. This identification triggers the interdependence mechanism under Articles L. 312-44 to L. 312-56 of the Consumer Code. If the principal contract (the sale or service provision) is annulled, terminated, or left unperformed, the credit agreement is automatically brought down. Symmetrically, as long as the good has not been delivered or the service rendered, the borrower’s obligations to the lender do not take effect. This mechanism is the great strength of linked credit for the borrower, but it is never automatic: the allocation must be stated in the contract, failing which the protection is displaced.

Revolving credit

Revolving credit was long the primary vector of household over-indebtedness. A reserve of money is made available to the borrower, who may draw on it freely and replenish it through repayments. Each draw incurs interest, often at rates close to the usury threshold. The Lagarde Act of 2010 considerably tightened the regime: maximum repayment duration, obligation to amortise a minimum fraction of capital with each payment, enhanced information on the outstanding balance, obligation to reassess solvency at each renewal, and – crucially – an obligation to offer an amortising alternative for any purchase exceeding EUR 1,000 financed by a revolving facility. Annual renewal is itself regulated by Article L. 312-65: the borrower must be informed of renewal conditions three months before the anniversary and may object.

Hire-purchase (LOA)

Hire-purchase (location avec option d’achat), sometimes called leasing, is not legally a credit but a rental with a purchase option. The Consumer Code nevertheless subjects it to the consumer credit regime where it concerns movable property and is granted to an individual (Art. L. 311-1, 8°). This assimilation protects the consumer, who benefits from the rules on pre-contractual information, withdrawal, and forfeiture of interest. LOA litigation is extensive, particularly on the question of recharacterisation: at what point is the purchase option sufficiently firm for the transaction to be recharacterised as an instalment sale?

Evolution of the legal framework

Understanding the positive law of consumer credit requires knowing its genealogy. The current regime is the sedimentation of three great legislative waves, plus a reform underway.

From the Scrivener Act to the Lagarde Act

The Act of 10 January 1978, known as the Scrivener Act, is the founding instrument. It imposed, for the first time, a public-policy formalism on credit institutions, with a mandatory written pre-offer and a seven-day reflection period. The architecture it established – information, time limit, sanction by forfeiture – remained in force for over thirty years. At European level, Directive 87/102/EEC of 22 December 1986 initiated a first minimum harmonisation, which Directive 2008/48/EC of 23 April 2008 transformed into full harmonisation.

It was the Act of 1 July 2010, known as the Lagarde Act, that transposed this directive into French law. Its contributions are considerable: creation of the Standard European Consumer Credit Information form (SECCI), obligation to assess the borrower’s solvency before granting credit, strict regulation of revolving credit, extension of the withdrawal period from seven to fourteen days, reform of over-indebtedness treatment. The stated philosophy was “responsible lending”: making the lender accountable to prevent over-indebtedness. The Ordinance of 14 March 2016 then recodified the legislative part of the Consumer Code without changing the substance.

The 2025 reform: a new directive, a new logic

The framework is entering a new phase. Ordinance No. 2025-880 of 3 September 2025 transposes the revised European directive replacing the 2008 text. It is supplemented by Ordinance No. 2025-1154 of 2 December 2025 and Decree No. 2026-105 of 19 February 2026. The package will enter into force on 20 November 2026. Until that date, current rules apply; after it, new contracts will fall under the new regime, while pre-existing contracts remain governed by the rules in force at the date of their conclusion.

The reform’s main thrusts: enhanced pre-contractual information (with a revised, more concise SECCI), tightened solvency assessment (specific data, prohibition on certain categories of data), integration of online credit and platforms, and regulation of buy-now-pay-later practices that previously escaped regulation. The guiding principle remains the same: European harmonisation and prevention of over-indebtedness.

The lender’s pre-contractual obligations

The protective regime is built around a simple principle: the borrower’s consent is never presumed to be informed. It must be, and it is for the lender to prove it. Pre-contractual obligations deploy three successive requirements: inform, assess solvency, warn.

Pre-contractual information and the SECCI

Before any conclusion, the lender must provide the borrower with the Standard European Consumer Credit Information form (SECCI) under Article L. 312-12 of the Consumer Code. This standardised document, whose format is fixed by decree, allows comparison of offers on homogeneous criteria: amount, duration, borrowing rate, APRC, total cost, payment amount and frequency, required guarantees, optional or mandatory insurance. The concept is simple: two forms placed side by side must be immediately comparable by an average borrower.

Failure to provide the SECCI, or providing it in a non-compliant format, is sanctioned by forfeiture of interest. The Cour de cassation consistently holds that the burden of proving delivery lies with the lender: a contractual clause stating the borrower acknowledges receipt constitutes no more than an indication, since a reversal in case law (Cass. 1re civ., 21 October 2020, No. 19-18.971). The lender must now provide effective proof of delivery, which is rarely possible in older disputes.

Mandatory solvency assessment

Article L. 312-16 of the Consumer Code requires the lender, before any conclusion, to assess the borrower’s solvency. This assessment rests on two elements: consultation of the national payment default register (FICP), maintained by the Banque de France, and analysis of information provided by the borrower on their income, outgoings, and assets. For credit exceeding EUR 3,000, or concluded at a distance, Article D. 312-8 requires supporting documentation.

Despite its practical limitations – the FICP only records defaults already declared and gives only a partial picture of solvency – the consultation remains an obligation whose breach is sanctioned. The court may raise the point of its own motion and pronounce forfeiture of interest where proof of the assessment is lacking.

The duty to warn the unsophisticated borrower

Beyond information and solvency assessment, case law has forged a third level of protection: the duty to warn. Established by the joint chambers of the Cour de cassation in 2007, it obliges the lender to alert the borrower when the transaction presents a risk of excessive indebtedness relative to their financial capacity. This duty does not apply to all borrowers: it is reserved for the unsophisticated borrower, a classification assessed case by case according to the person’s training, experience, and professional situation. Breach is sanctioned by damages assessed on the loss of chance of not having incurred the debt.

Formation of the contract and the right of withdrawal

Once information has been delivered and solvency assessed, the contract enters its formation phase. The Consumer Code imposes three safeguards: a compliant offer, a withdrawal period, and an interdependence mechanism for linked credit.

The prior offer and mandatory particulars

Article L. 312-18 of the Consumer Code lists the particulars the credit offer must contain, on pain of forfeiture of interest. These include: identity of the parties, total credit amount, duration, borrowing rate, APRC, total cost, payment amount and frequency, required guarantees, conditions for modification or early repayment. The offer must include a summary box at the head of the contract, in a minimum 8-point font (Art. R. 312-10). The concept is to concentrate essential information in a single glance, so that even a hurried borrower cannot miss the key parameters.

The offer must maintain its conditions for at least fifteen days from delivery to the borrower.

The fourteen-day withdrawal period

After acceptance, the borrower has a fourteen calendar-day withdrawal period (Art. L. 312-19). This right is exercised by means of a detachable withdrawal slip mandatorily annexed to the contract (Art. R. 312-9). The absence or non-compliance of this slip is sanctioned by forfeiture of interest.

Interdependence of linked credit and the sale

Article L. 312-55 of the Consumer Code establishes the rule of interdependence: “The credit agreement is automatically terminated or annulled where the agreement it was intended to finance is itself judicially terminated or annulled.” This interdependence works both ways. If the financed sale is annulled or terminated by the court, the credit agreement is automatically brought down: the borrower is released from the repayment obligation. Symmetrically, as long as the good has not been delivered or the service rendered, the borrower’s obligations do not take effect, even if the funds have been disbursed.

This mechanism is one of the most effective in consumer law. It allows a buyer facing a defaulting seller – undelivered goods, defective goods, unperformed services – to neutralise the credit agreement by attacking the principal contract. The lender cannot shelter behind its autonomy: its claim follows the fate of the financed transaction.

Forfeiture of interest: the central sanction

Consumer credit law is built around a single sanction whose deterrent effect justifies the entire protective architecture: forfeiture of interest (decheance du droit aux interets). Articles L. 341-1 et seq. of the Consumer Code define its conditions and effects.

The mechanism: contractual interest versus the statutory rate

Where the court finds a breach of any of the lender’s obligations – missing SECCI, non-compliant offer, absent withdrawal slip, inadequate solvency assessment, omitted mandatory particular – it may pronounce total or partial forfeiture of contractual interest. Concretely, contractual interest is erased and replaced by the statutory interest rate. The borrower then owes only the borrowed capital, plus interest at the statutory rate calculated over the period elapsed. Interest already paid at the contractual rate must be credited against the capital, reducing the remaining debt accordingly.

This sanction can represent a considerable saving, particularly for revolving credit agreements whose borrowing rates often exceed 15-20%. Since the reform of the ordinance of 17 July 2019, the court has a power of modulation: forfeiture is no longer automatic and total; it is “proportionate to the loss” suffered by the borrower.

CJEU intervention: guaranteeing the effectiveness of the sanction

A structural problem arose with the rise in ECB key rates from 2022. The statutory interest rate, indexed to market conditions, can exceed the contractual rate. The sanction then loses all deterrent force: the borrower ends up paying more at the statutory rate than they paid at the contractual rate. Article L. 313-3 of the Monetary and Financial Code further provides for an automatic five-point increase in the statutory rate two months after judgment, worsening the situation.

The Court of Justice of the European Union provided a decisive answer in its judgment of 27 March 2014, LCL v Fesih Kalhan (Case C-565/12). It held that Article 23 of Directive 2008/48/EC precludes a national sanctions regime in which the operation of the statutory interest rate nullifies the deterrent effect of forfeiture. The principle is clear: the amounts the sanctioned lender may receive must be “significantly lower” than those it would have received had it met its obligations. The sanction must retain an effective, proportionate, and dissuasive character, in accordance with EU law requirements.

In practice, the French court faced with a situation where the statutory rate exceeds the contractual rate must disapply the mechanical application of the statutory rate and set a rate that guarantees the effectiveness of the sanction.

Litigation: the consumer protection judge and the two-year time bar

Consumer credit litigation is subject to derogatory procedural rules concerning both jurisdiction and the lender’s limitation period. These rules are of public policy and may be raised by the court of its own motion.

Jurisdiction of the consumer protection judge

Since the 2019 justice reform, consumer credit disputes fall within the exclusive jurisdiction of the consumer protection judge (juge des contentieux de la protection, JCP). This is a judge within the judicial tribunal (tribunal judiciaire) handling everyday disputes: housing leases, consumer credit, over-indebtedness, adult guardianship. Legal representation is not mandatory, and the procedure is simplified to facilitate access to justice.

The two-year time bar: a public-policy defence

Article R. 312-35 also establishes a two-year time bar for actions brought by the lender against the defaulting borrower. This time bar is one of the most important features of consumer credit law: it falls outside the ordinary limitation rules (five years for personal actions under Article 2224 of the Civil Code) and operates as a true ground of inadmissibility of public policy. Once two years have elapsed, the lender’s action is inadmissible; the court must reject it, even if the borrower does not raise the point.

The determination of the starting point is the most disputed question. Case law distinguishes according to the nature of the default. For the first unremedied missed payment, the period runs from the date of that missed payment. For loan acceleration, it runs from the date the acceleration was notified to the borrower. For revolving credit, the starting point is the last use of the account by the borrower.

The court’s power to act of its own motion

Article R. 632-1 of the Consumer Code confers a remarkable power on the court: that of raising of its own motion any provision of the Code in disputes within its scope. The CJEU confirmed the extent of this power in a judgment of 5 March 2020, requiring the national court to examine of its own motion compliance with the consumer protection rules. This power transforms the dynamics of litigation: even if the borrower does not command the technical rules of the Consumer Code, the court is bound to apply them where it identifies an irregularity in the documents produced by the lender. The burden of proof lies on the lender, which must produce a complete and compliant file – SECCI delivered, withdrawal slip annexed, solvency assessed – or risk forfeiture being pronounced without the point even having been raised by the opposing party.

Interaction with over-indebtedness

Individual consumer credit litigation articulates in practice with the collective treatment of over-indebtedness. Where the accumulation of credit makes the situation irretrievably compromised, the borrower may apply to the over-indebtedness commission of the Banque de France (Art. L. 711-1 et seq. Consumer Code). Acceptance of the application automatically stays enforcement proceedings and interrupts pending individual actions. The conventional plan negotiated with creditors, or failing that the measures imposed by the commission, may include rescheduling, deferral, or even partial discharge. In the most compromised situations, the personal recovery procedure allows total discharge of non-professional debts. The over-indebtedness guide sets out these mechanisms in detail.

The firm regularly assists borrowers in analysing consumer credit agreements, in defence before the consumer protection judge, and in determining next steps after a forfeiture judgment. Formal irregularities are more common than is generally believed, and the burden of proof on the lender – accentuated by recent case law – opens real margins of defence. If you are facing an action from your lender, a loan acceleration, or simply an agreement whose terms seem opaque, our credit law team can analyse your situation and identify the available grounds.

Sources and legal references

Legislation

• Consumer Code, Articles L. 312-1 to L. 312-95 – Consumer credit regime
• Article L. 312-4 C. conso. – Scope, thresholds, and exclusions
• Article L. 312-12 C. conso. – Standard European Consumer Credit Information (SECCI)
• Article L. 312-16 C. conso. – Mandatory solvency assessment
• Article L. 312-18 C. conso. – Mandatory particulars of the credit offer
• Article L. 312-19 C. conso. – 14-day right of withdrawal
• Articles L. 312-44 to L. 312-56 C. conso. – Linked credit and interdependence
• Articles L. 341-1 et seq. C. conso. – Forfeiture of interest
• Article R. 312-35 C. conso. – JCP jurisdiction and two-year time bar
• Article R. 632-1 C. conso. – Court acting of its own motion
• Directive 2008/48/EC of 23 April 2008, Article 23
• Lagarde Act of 1 July 2010
• Ordinance No. 2025-880 of 3 September 2025 – Transposition of the revised directive (entry into force 20 November 2026)

Case law

• CJEU, 27 March 2014, LCL v Fesih Kalhan, Case C-565/12 – Effectiveness of the sanction; statutory rate must not nullify forfeiture
• CJEU, 5 March 2020, OPR-Finance, Case C-679/18 – Court’s power to act of its own motion
• Cass. ch. mixte, 29 June 2007, No. 05-21.104 – Duty to warn (landmark ruling)
• Cass. 1re civ., 21 October 2020, No. 19-18.971 – Proof of SECCI delivery: acknowledgement clause is merely indicative
• Cass. 1re civ., 1 February 2023, No. 21-18.817 – Starting point of the limitation period for the forfeiture action

Frequently asked questions about consumer credit in France

What is the withdrawal period for consumer credit?

The borrower has fourteen calendar days to withdraw from the agreement, starting from the day after acceptance (Art. L. 312-19 of the Consumer Code). This right is exercised without reason and without penalty, by returning the detachable slip annexed to the contract. If funds have already been disbursed, the borrower must return the capital received plus interest accrued between disbursement and repayment, calculated at the contractual rate. No additional indemnity may be charged.

Can consumer credit be repaid early?

Article L. 312-34 of the Consumer Code grants the borrower the right to repay early, in whole or in part, at any time and without justification. The lender may not refuse. However, it may charge an early repayment indemnity, capped by Article R. 312-2: it may not exceed 1% of the amount repaid if the remaining term exceeds one year, or 0.5% if the remaining term is one year or less. This indemnity may in no case exceed the interest the borrower would have paid during the remaining period. No indemnity is due where the early repayment is less than EUR 10,000 within a twelve-month period.

What is the maximum amount for consumer credit?

The protective regime applies to transactions between EUR 200 and EUR 75,000 (Art. L. 312-1 and R. 312-1 of the Consumer Code). Below EUR 200, the transaction falls outside the framework. Above EUR 75,000, general lending law applies, unless the credit is tied to real estate, in which case the mortgage credit rules take over. This ceiling was raised from EUR 21,500 to EUR 75,000 by the Lagarde Act of 1 July 2010. It is assessed against the total credit amount – the capital made available, excluding interest and charges.

What is forfeiture of interest in consumer credit?

Forfeiture of interest is the civil sanction pronounced by the court where the lender has breached its statutory obligations: failure to assess solvency, incomplete credit offer, omission of the pre-contractual information form or the withdrawal slip, error in the APRC calculation (Art. L. 341-1 et seq. of the Consumer Code). The lender loses the right to collect contractual interest, and the borrower is only required to repay the outstanding capital, plus interest at the statutory rate. Interest already paid is credited against the capital. Since 2019, the court may modulate the extent of the forfeiture according to the seriousness of the breach and the loss suffered, subject to the principle of effectiveness established by the CJEU.

What is the time bar for consumer credit claims?

The lender’s action for payment is subject to a two-year time bar (Art. R. 312-35 of the Consumer Code). This runs from the first unremedied missed payment or, where loan acceleration has been declared, from the date of that declaration. It is a public-policy time bar that the court must raise of its own motion: once expired, the action is inadmissible, with no possibility of rectification. For revolving credit, the starting point may be more difficult to determine, as it depends on the last debit to the account.

What can be done in case of repayment difficulties?

Several levers exist depending on the severity of the situation. The borrower may first seek an amicable rearrangement with the lender: deferred payments, extended duration, temporary reduction of instalments. If this fails, the consumer protection judge may be asked to grant a grace period of up to two years of suspension or rescheduling (Art. 1343-5 of the Civil Code). If the debt is global and irretrievably compromised, filing an over-indebtedness application with the Banque de France provides access to imposed or recommended measures, including partial or total debt discharge. In all cases, it is essential not to let missed payments accumulate without acting: the two-year time bar runs from the first unremedied default.