Consumer Loan Agreements: OGH Rules on Processing Fees

Dec 19, 2025 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) was tasked with ruling on the transparency of a particular clause regarding the loan’s processing fee, and whether it was invalid.

In August 2017, the consumer plaintiffs took out a mortgage loan of  EUR 426,000 from the defendant bank to purchase a terraced house, which also served as collateral. The loan agreement stated that the plaintiffs would pay a ‘processing fee’ of EUR 9,450 and additional ‘one-off costs’ of around EUR 5,000.

Plaintiffs contest processing fee clause over transparency issues

In their legal action, the plaintiffs sought restitution for the processing fee. They argued that the clause was non-transparent because it was not clear from the agreement what the fee was being charged for.

The court of first instance dismissed the lawsuit. It found that the provisions and terms contained in the standard form agreement were neither unclear nor incomprehensible. The court of appeal upheld this ruling.

The OGH followed the decisions of the lower courts.

Court finds no overlap in bank’s loan fee categories

The benchmark for assessing the transparency of a clause is the understanding of the average, informed, and reasonable consumer. Such a consumer would understand that a ‘processing fee’ is payable for the bank’s activities and expenses in processing and providing each loan. If only a processing fee is agreed, there is no overlap with other fee categories from the outset. If, on the other hand, several fees are agreed, it must be clear to the consumer which expense is attributable to which fee. However, a processing fee is not an additional fee, but rather a reimbursement of expenses.

In the present case, the OGH assessed the loan processing fee clause as transparent. An attentive and knowledgeable average consumer would understand that the processing fee and the one-off costs cover different activities of the bank and can be assigned to their respective fee category without overlap.

OGH 3 Ob 77/25g, 26 November 2025