The new Consumer Credit Act 2026 („Verbraucherkreditgesetz 2026“, VKrG 2026) – what is changing?

Created by Mag. Sylvia Unger |
Banking Law , Civil Law , Contract Law

The Consumer Credit Law Amendment Act 2026 („Verbraucherkreditrechts-Änderungsgesetz 2026“, VerKRÄG 2026) which was passed in May 2026 to implement the new EU Directive on credit agreements for consumers, provides for the repeal of the previously applicable Consumer Credit Act (VKrG) and the enactment of a new Consumer Credit Act 2026 (VKrG 2026). Why are these changes necessary, and what new provisions will be introduced?

 

1.   Why is the new VKrG 2026 necessary?

On 18 October 2023, EU Directive 2023/2225 on credit agreements for consumers was published, replacing the Directive on credit agreements for consumers from 2008. New legislation was necessary, in particular, due to advancing digitalisation and the emergence of new products. To implement the new Directive, the VerKRÄG 2026 was promulgated in Austria on 10 June 2026 (BGBl. I Nr. 36/2026), which repeals the previously applicable VKrG and enacts the new VKrG 2026. The new VKrG 2026 will come into force on 20 November 2026 and, unless otherwise specified, will apply to credit agreements and loans concluded or granted after 19 November 2026. The old VKrG will therefore cease to apply at the end of 19 November 2026, but will continue to apply to credit agreements and loans concluded or granted before 20 November 2026.

 

Please note: As the new Directive on credit agreements for consumers is fully harmonising, national provisions which, in the areas covered by the Directive, deviate in substance from the Directive are inadmissible even if they provide consumers with greater legal protection or place them in a more favourable legal position!

 

2.   What changes does the VKrG 2026 bring?

The main aim of the new Consumer Credit Directive is to improve consumer protection. To achieve this aim, new, far-reaching regulations have been introduced.

 

2.1  What changes are there to the scope of application?

New additions to the scope of the VKrG 2026 include, in particular, micro-loans and credits provided free of interest:

  • There will no longer be a minimum limit (previously, loans under EUR 200 were not recorded)

  • Financial assistance and payment deferrals, such as so-called ‘buy now, pay later’ credit models, are covered by the scope of application. These are loans intended exclusively for the purchase of goods and services (e.g. Klarna).

 

2.2 What must credit institutions now take into account BEFORE concluding credit agreements? 

  • The form for pre-contractual information requirements has been revised and expanded. 

  • Lenders and credit intermediaries must provide general information even before the contractual relationship is initiated.

  • The requirements for creditworthiness checks have been tightened. In particular, a ban on granting credit has been introduced in cases where a creditworthiness assessment yields a negative result. The principles and information regarding how the assessment is to be carried out are clearly defined and stipulate, in particular, that it must not be based solely on the consumer’s credit history.

  • A prohibition on discrimination has been included. This stipulates that consumers who are lawfully resident in the EU must not be discriminated against on the grounds of their nationality, place of residence or any of the grounds set out in Article 21 of the Charter of Fundamental Rights of the European Union when they wish to apply for or enter into a credit agreement within the Union. 

  • Advertisements for credit agreements must clearly and prominently state that taking out a loan costs money. The Directive provides the following example of wording: ‘Caution! Borrowing money costs money!’ Credit advertising that suggests a false or overly positive picture of taking out a loan is prohibited.

 

2.3 How is digitalisation changing consumer credit? 

  • Pre-contractual information must be displayed appropriately on a wide variety of digital devices (e.g. mobile phone screens). In particular, interoperability must be taken into account.

  • The use of pre-selected options will be prohibited in future (e.g. pre-ticked consent boxes).

  • Where a creditworthiness assessment is carried out by means of automated data processing, consumers will have rights to information and the right to human intervention.

 

2.4 What else is new?

  • In the event of a significant overdraft lasting more than one month, the lender must inform the consumer of the overdraft immediately. In the case of regular overdrafts, the lender is obliged to actively offer the consumer advisory services and to refer them, free of charge, to a debt advice service.

  • In the event of early repayment, the consumer is entitled to a reduction in the total cost of the credit for the remaining term.

  • If the borrower experiences payment difficulties, the lender is subject to reasonable forbearance before enforcement proceedings are initiated. This may take the form of a restructuring of the credit agreement or amendments to the existing terms and conditions.

     

3.   Conclusion

The new VKrG 2026 enhances consumer protection and extends it to cover further new forms of financing and products. For credit institutions, this means additional obligations and a need to adapt internal processes, such as creditworthiness assessments, pre-contractual information requirements and advertising.