GER: Additional Regulations for Consumer Loans Forthcoming

Jul 4, 2025 Benn-Ibler Rechtsanwälte

The German Federal Ministry of Justice (Bundesministerium für Justiz, BMJ) has introduced a draft bill to implement the revised EU Consumer Credit Directive. This legislation aims to enhance consumer protection in credit agreements. It includes provisions to regulate financing options such as 'buy now, pay later' by law.

Implementation of Directive (EU) 2023/2225

The draft bill aims to implement Directive (EU) 2023/2225 on consumer credit agreements and to repeal Directive 2008/48/EC in German law. The primary goal is to ensure a high standard of consumer protection and to support the internal market for credit between consumers and businesses.

Buy now pay later, small loans, deferred payments

The regulation will cover previously less regulated financing methods, including ‘buy now, pay later’ models, interest-free small loans, and short-term payment deferrals. ‘Buy now, pay later’ refers to a financial arrangement where the payment for a purchase is postponed to a future date. It involves deferring the payment, effectively functioning as a short-term loan.

The draft introduces several key components, including more stringent creditworthiness checks that will now be applied to small loans under the same regulations as real estate loans. Additionally, enhancements to the protection against termination for overdraft facilities are proposed. Moving forward, the text form will be sufficient for concluding general consumer loans, enabling such loans to be finalized for example via email.

The information requirements should be structured to achieve effective consumer protection without placing an excessive burden on consumers.

Member States are required to transpose the EU Consumer Credit Directive into national law by November 20, 2025, and must apply it by November 20, 2026, at the latest.

Draft bill for the implementation of Directive (EU) 2023/2225