DE: What information must a consumer loan contract contain?

Jun 10, 2022 Benn-Ibler Rechtsanwälte

In consumer loan contracts, the information on the interest rate on arrears must include the specific percentage rate applicable at the time of the conclusion of the contract. The German Federal Supreme Court (Bundesgerichtshof, BGH) thus changes its previous case law. A mere indication of the statutory arrears interest rate thus no longer meets the requirements.

In the case at hand, the parties disputed the validity of the revocation of a consumer loan agreement. The buyer of a BMW financed the car via a loan agreement with the seller. The terms of the loan contained the following statement on the consequences of arrears: "The statutory arrears interest of five percentage points above the respective base interest rate per year ... will be charged for missed payments."

According to the BGH, the Higher Regional Court wrongly assumed here that the defendant seller was obliged to inform about the arrears interest rate and its possible adjustment. This assumption was in line with the previous case law of the BGH. The wording of the applicable provision Article 247 Section 3 para 1 No. 11 of the Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch - EGBGB) also leaves open whether there is an obligation to inform about the specific arrears interest rate in the loan agreement. However, the Court of Justice of the European Union has ruled that Article 10 para 2 book l of Directive 2008/48/EC is to be interpreted as meaning that the rate of interest on arrears applicable at the time of the conclusion of the contract must be stated in the loan agreement in the form of a specific percentage rate. Accordingly, the wording " arrears interest rate" in Article 247 Sec. 3 para 1 No. 11 EGBGB requires, when interpreted in conformity with the Directive, the indication of the specific percentage rate applicable at the time of the conclusion of the contract. The BGH has now adapted its case law to these requirements. 

BGH XI ZR 179/21 (12.04.2022)