Concluding a credit contract

Consider your ability to pay and the final price of the credit before you take out a loan. It is worth comparing loans and their costs.

A loan also involves financial risks. Before taking out a loan, consider your ability to pay it back, the contract you are about to conclude, and the total costs of the loan. If you have a bad credit history, you usually cannot get a loan.

Paying by credit normally means extra costs compared to paying by cash. It is worth comparing different credit options and their costs.

Consumer credit can be a one-time loan or continuous credit  

  • Continuous credit means consumer credit that the consumer can use constantly up to the agreed limit, without needing a separate decision made by the lender. A credit limit or credit line is agreed for a credit card or other continuous credit product. The consumer can then use their card up to the agreed limit.

    The interest costs of continuous consumer credit depend on how much credit you use each month. The lender may charge such costs as annual fees, an interest that depends on how much credit you use, and account management fees for a credit card.

  • In a one-time loan, you take out a specific amount as a loan. You pay back the loan in one or several instalments within the agreed time. One-time loans may be secured or unsecured.

  • Payment by instalments means that you pay the price of the goods, or part of it, in instalments after the goods have been handed over to you. If you pay for a purchase by instalments, the vendor still has the right of ownership to the goods, or the right to take them back, until you have paid the full price or at least a certain part of it.

Assessing creditworthiness

Before a lender concludes a credit contract, they must determine if the applicant is creditworthy. This means that the lender must assess the applicant’s creditworthiness based on sufficient information about the lender’s income and other financial circumstances.

To check this information, the lender may ask you about not only your income but also your debts and assets, and request that you submit such documents as a payslip or pension and tax certificates.

Read the terms and conditions of the credit contract carefully and retain them for future reference

The terms and conditions of the credit contract show the type of the loan, payment obligations and the parties’ other rights and obligations. You may repay the loan fully or in part before the due date, even if this is not mentioned in the contract terms. Read the terms and conditions of the loan carefully and keep them safe to avoid any misunderstandings.

A consumer credit contract must be made in writing, and the borrower must be given a copy of the contract. The contract may also be concluded electronically if the borrower can save and print it out for themselves without modifications.

When you take out a loan, you should always check who the lender is and who you can contact about issues related to the loan. For example, in shops selling furniture and home appliances, the loan is often granted by a separate finance company, even if the contract is concluded in the shop.


You can usually pay back a credit card loan either as a lump sum on the due date or as monthly repayments in agreed amounts. The lender may offer you a fixed instalment loan, annuity loan or fixed period loan.

What are an annuity loan, a fixed instalment loan and a fixed period loan? (Financial Supervisory Authority)

Read more: What are an annuity loan, a fixed instalment loan and a fixed period loan? (Financial Supervisory Authority) 

The borrower has the right to receive an amortisation table

If you have taken out a fixed-term loan that you pay back in instalments, you have the right to ask for a free amortisation table. The table must show the payments to be made, the payment periods and terms of payment. Each instalment must be itemised, showing the amounts paid as capital amortisation, interest and other fees.

Changes in interest rate

The lender may change the current interest on a loan based on the reference rate specified in the contract if this is mentioned in the contract terms. The lender must inform the borrower of changes in the interest rate in a permanent form (such as a letter) before the changes take effect or on dates set out in the contract. This information must include the amount of individual payment instalments after the change in interest rate. The lender must also inform the borrower of any changes in payment dates or the number of instalments.

For businesses