VerKRÄG 2026: New Rules for Consumer Loans Effective November 2026

On November 20, 2026, the Consumer Credit Act 2026 (VKrG 2026) will take effect. It is the centerpiece of the previously announced Consumer Credit Law Amendment Act 2026 (VerKRÄG 2026, Federal Law Gazette I No. 36/2026) and implements Directive (EU) 2023/2225 on consumer credit agreements in Austria. The previous Consumer Credit Act will expire on November 19, 2026, but will generally continue to apply to contracts concluded prior to that date (Art. 1 VerKRÄG 2026; § 45 VKrG 2026).

The reform affects not only banks and traditional installment loans. Depending on their structure, deferred payment arrangements in retail, digital financing offers, and certain lease agreements may now also fall under the new rules. It will therefore be crucial for companies to first correctly classify their products and then adapt their advertising, contract documents, and closing processes accordingly.

Expanded Scope of Application: Retail Is Also Affected

The scope of application of the provisions governing consumer credit has been significantly expanded. 

The VKrG 2026 now covers consumer credit agreements between a business as a lender and a natural person acting for a purpose outside their professional or commercial activities. The rules for consumer credit agreements generally also apply to payment deferrals and other forms of financial assistance that a business grants to a consumer. 

Whether installment purchase and “buy now, pay later” models fall under this scope will have to be assessed in the future based on their specific terms, as not every payment deferral triggers the obligations set forth in the VKrG 2026. An exception applies, for example, if the supplier of goods or the service provider grants an interest- and fee-free payment deferral on their own—without a credit offer from a third party—and the price is to be paid in full within 50 days of delivery or performance, although limited costs may still apply in the event of late payment. If a company—other than a microenterprise or a small or medium-sized enterprise—offers information society services for distance contracts with consumers, additional requirements apply: No third party may acquire the claim, and payment must be made in full within 14 days of delivery or performance (Section 39(2)(3) VKrG 2026).

Even loans under EUR 200 are not generally exempt solely because of their amount. For such loans, certain additional disclosures in advertising and certain supplementary pre-contractual information are not required. The same applies to loans that must be repaid within three months and incur only minor costs. Certain consumer lease agreements entered into for consideration are also considered forms of financing, such as those with a purchase option or an agreement under which the consumer is liable for a specific residual value of the item (Section 8(2), Section 10(5), and Section 41(1) of the VKrG 2026).

The Key Changes

Advertising and Pre-Contractual Information

In the future, credit advertising must include a clear and conspicuous warning. As soon as an advertisement mentions interest rates or other figures related to credit costs, standard information must also be provided using a representative example, in particular the borrowing rate, the total amount of credit, and the annual percentage rate (APR). However, advertising that suggests, for example, that a loan will improve the consumer’s financial situation or that existing loans are irrelevant to the review of an application is prohibited (Section 8 of the VKrG 2026).

Before consumers are bound by a contract or an offer, they must receive clear and understandable information in a timely manner so that they can compare credit offers. For this purpose, the form “European Standard Information for Credit Agreements under the Consumer Credit Act” as set forth in Annex I must generally be used on paper or another durable medium of the consumer’s choice. Essential information, including the loan amount, term, interest rates, total amount, and costs in the event of late payment, must be prominently displayed in the first part of the form. This must generally be presented on one page; if necessary, it may be presented on a maximum of two pages. While the form in Annex II is intended for certain agreements regarding payment deferrals and repayment terms, Annex III contains the guidelines for calculating the annual percentage rate (Sections 10, 11, and 42 of the VKrG 2026).

Active Consent and Limits on Tied Sales

A consumer loan may not be granted without the consumer’s prior request and express consent. Preselected options, such as pre-checked boxes, do not constitute consent either for the loan agreement or for any ancillary service. However, the consumer may consent to the agreement retroactively. If checkboxes are used, consent must be given through a clear, voluntary, and informed affirmative action specific to that instance. This is particularly relevant for digital transaction processes (Sections 7 and 15 of the Consumer Credit Act of 2026).

There are also limits on the joint marketing of loans and ancillary products. Tied sales, in which the loan cannot be concluded separately, are generally prohibited, although exceptions exist, in particular, for accounts with legally defined purposes and for relevant insurance policies. If the lender requires insurance, taking proportionality into account, it must accept a policy from another provider offering equivalent coverage without altering the offered loan terms. Lenders and insurers must generally allow the consumer at least three days to compare insurance offers and must inform the consumer of this. An earlier conclusion of the contract is possible at the consumer’s express request (Section 14 VKrG 2026).

Creditworthiness and Automated Decisions

Before concluding the contract, the consumer’s creditworthiness must be thoroughly assessed. This assessment must be based on relevant and accurate information regarding income, expenses, and other financial and economic circumstances. The lender must establish, document, and retain its assessment procedures, as well as document the information obtained. Social media platforms are not considered permissible external sources for this assessment. Furthermore, special categories of personal data may not be used for this purpose. A loan may only be granted if the assessment shows that the consumer is likely to be able to fulfill their obligations in accordance with the contract (Section 17 VKrG 2026).

If an offer is personalized based on the automated processing of personal data, the consumer must be informed of this. If the creditworthiness assessment involves such processing, the consumer may request human intervention on the part of the lender. In particular, the consumer is entitled to a clear explanation of the assessment—including the logic and risks of automated processing—may present their point of view, and may request a review of the creditworthiness assessment as well as the decision to grant the loan (Sections 13 and 17(5) of the VKrG 2026).

Withdrawal, Early Repayment, and Payment Difficulties

Consumers may withdraw from a credit agreement within 14 days without providing a reason. The period begins upon conclusion of the agreement or, if the terms of the agreement and mandatory information under § 20 VKrG 2026 are received later, upon receipt of such information. If the consumer does not receive these documents, the period generally ends no later than twelve months and 14 days after the contract is concluded; this maximum period does not apply if the consumer was not informed of their right of withdrawal. In the case of a linked loan for goods, a right of return with full refund that lasts longer than 14 calendar days may extend the withdrawal period for the loan. There is no right of withdrawal for residual-value leases without a right of purchase.

Full or partial early repayment is generally possible at any time, in which case the total cost of credit for the remaining term must be reduced. Reasonable and objectively justified compensation for costs directly related to the early repayment may only be considered under statutory conditions. In particular, such compensation is excluded if no more than EUR 10,000 is repaid early within a twelve-month period, if the repayment occurs during a period without a fixed borrowing rate, or if the loan was granted as an overdraft facility. To the extent that compensation is permissible, its upper limit is 0.5% of the amount repaid early if the remaining term is one year or less, and 1% in all other cases. Furthermore, it may not exceed the interest that would have accrued on the amount in question until the end of the term (Section 29 VKrG 2026).

In the event of payment difficulties, lenders must, depending on the circumstances, exercise appropriate leniency tailored to the individual situation before initiating foreclosure proceedings. Possible options include a payment deferral, an extension of the term, or debt restructuring. Consumers having difficulty meeting their financial obligations must be referred to easily accessible debt counseling services. Additional rules apply to the reduction or cancellation of an agreed-upon overdraft facility or a tolerated overdraft: As a general rule, the lender must give at least 30 days’ advance notice and, prior to initiating enforcement proceedings, offer the affected party the option to repay the amount already drawn down in twelve equal monthly installments at no additional cost (Sections 31, 35, and 38 of the VKrG 2026).

Conclusion

The following conclusions can be drawn for the various parties involved in a consumer credit agreement:

1. Lenders: Those offering consumer credit will have to align their advertising claims, information forms, model contracts, consent mechanisms, creditworthiness checks, and delinquency procedures with the VKrG 2026
2. Retailers and leasing providers: If financing models are offered, their specific terms must be carefully reviewed in the future. In particular, when granting payment deferrals, the requirements of the VKrG 2026 must be carefully reviewed.
3. Consumers: The reform enhances the comparability of offers and gives consumers greater control over the conclusion of contracts. It combines information and verification obligations with rights regarding automated procedures, early repayment, and payment difficulties, thereby significantly improving the position of consumers.