Germany’s new consumer credit law takes effect on November 20, 2026. The law changes how Buy Now Pay Later (BNPL), small loans, and your overdraft (Dispokredit) are regulated.
The Bundesrat passed the consumer credit law on May 8, 2026, implementing the EU Consumer Credit Directive.
Under the law, BNPL purchases become regulated consumer loans with a 14-day right of withdrawal (Widerrufsrecht). Before November 20, 2026, BNPL purchases carry no right of withdrawal, so any cancellation option is voluntary.
Here are the four main changes the new consumer credit law brings, followed by the other rules that tighten lending.
#1 Buy Now Pay Later becomes a regulated consumer loan
BNPL services like Klarna and PayPal’s “Pay in 3” grew fast in Germany but sat outside consumer credit law.
A BNPL payment spread over a few weeks, interest-free, was not legally a loan (Darlehen). BNPL providers therefore never had to check whether you could afford the purchase.
The new consumer credit law aims to stop you from stacking BNPL installments across several apps, where nobody checks your total exposure.
Once the law is in force, BNPL purchases count as an ordinary consumer loan (§ 506 BGB). The new classification brings three changes:
- A 14-day right of withdrawal (Widerrufsrecht), without giving a reason. BNPL purchases carry no such right today.
- A mandatory creditworthiness check (Kreditwürdigkeitsprüfung) before the provider approves your purchase.
- Clear pre-contract information on the term, installments, and total cost before you confirm.
The 14-day right of withdrawal extends if the BNPL provider gives incomplete information about it. The withdrawal window then runs for 12 months and 14 days after signing.
NOTE: Before November 20, 2026, any cancellation option on a BNPL purchase is voluntary. Check the provider’s own terms if you want to back out early.
#2 Small loans under 200 euros now fall under credit rules
The old law exempted loans below €200 from most protections. Lawmakers assumed such small sums were too minor to cause harm. The new consumer credit law removes that €200 lower threshold.
Two groups of small loans fall explicitly into scope:
- Interest-free and fee-free loans, which make up the core of most BNPL models.
- Short-term credit with a term of up to three months.
Some lenders used to skip affordability checks under the old rules. They only had to keep loan amounts small or terms short.
#3 Your overdraft (Dispokredit) gains new protections
Three new rules apply to your overdraft once the law takes effect. All three strengthen your position if you regularly dip into it:
- You gain a right of withdrawal on your overdraft agreement, which did not exist before.
- Your bank must inform you at least monthly about the essential terms.
- If your bank ends your overdraft, it must give 30 days’ notice and then offer interest-free repayment.
If your bank ends your overdraft, you can pay back what you owe in 12 equal monthly payments, with no interest or extra fees. The same protection applies to tolerated overdrafts beyond your agreed limit.
#4 Invoice purchases (Rechnungskauf) mostly stay exempt from the new credit rules
Buying on invoice (Rechnungskauf) is common with German retailers, since you pay after the goods arrive. These invoice purchases stay outside the new credit rules in most cases.
The invoice exemption holds under two conditions:
- The retailer grants the payment deferral itself, free of charge.
- The payment deadline is no more than 50 days from delivery.
Large online retailers face a shorter window of 14 days if they are not a microenterprise or SME.
Debit cards with a short payment deferral stay exempt too, provided repayment is interest-free within 40 days and fees stay minor.
Stricter affordability checks apply to consumer loans
The approval bar for any consumer loan rises under the new law. A lender used to need only no significant doubt about repayment.
Now, repayment must be considered “likely,” based on your actual income, expenses, and finances. This is a higher bar than before.
Two further rules protect you as a borrower:
- If a loan carries a particular risk for you, the lender must now warn you explicitly.
- If a provider rejects your application, you can ask for a free written explanation.
Expect more checks at checkout once the law applies. You may see more detailed consent texts and more rejections overall.
NOTE: Missed BNPL or small-loan payments can be reported to Schufa, Germany’s main credit bureau. A low score can affect future rentals, mobile contracts, and loan applications.
New limits on automated credit scoring and interest rates
A related change to data protection law restricts automated credit scoring. Several data points can no longer feed into your score.
- Age, gender, and name.
- Social media activity.
- Bank account payment flows and address data.
Minors cannot be scored at all under the new rules. You also gain the right to contest an automated decision and demand human review.
The new law also caps interest rates in statute. A loan contract is void in either case:
- Its interest rate is more than double the market interest rate
- Its interest rate exceeds the market interest rate by more than 12 percentage points
Before pursuing enforced debt collection, a lender must first offer leniency, such as a payment extension.
