What a personal loan is
A personal loan, also called a consumer loan or unsecured loan, is a fixed sum lent to a private person without collateral. Typical amounts run from €1,000 to €70,000 and terms from one to ten years. You repay the same instalment every month, and the instalment covers both interest and part of the principal.
It is different from a credit card or a credit line, where the balance revolves and the monthly cost depends on how much you have drawn, and from a mortgage, where the property secures the debt and the rate is lower for that reason.
One rulebook, 27 markets
Consumer credit across the EU is governed by the Consumer Credit Directive. It requires every lender to show you the same standardised information sheet before you sign, to calculate the annual percentage rate (APR) with the same formula, to give you fourteen days to withdraw from the contract, and to let you repay early at a limited cost.
The revised directive, Directive (EU) 2023/2225, applies in all member states from 20 November 2026. It extends the rules to loans under €200 and to buy-now-pay-later credit, tightens the creditworthiness check, bans pre-ticked boxes for optional insurance, and requires every member state to have some form of cap on interest rates, the APR or the total cost of credit.
The APR is the one figure every EU lender must calculate the same way. Compare that, and the fees and insurance compare themselves.
What differs by country
Interest-rate caps
France sets a usury rate every quarter through the Banque de France: any loan priced above it is illegal. The Netherlands has a statutory maximum interest rate for consumer credit set by government decree and supervised by the AFM. Finland caps the nominal interest rate at fifteen percentage points above the reference rate, with an absolute ceiling of twenty percent.
Credit registers
Every lender must assess whether you can afford the loan, and what it looks at depends on the national register. In the Netherlands the BKR records every consumer loan, positive and negative, and lenders must consult it. In France the FICP, run by the Banque de France, records only payment incidents. Germany relies on Schufa, a private bureau that produces a score. Finland opened a positive credit register in 2024 that lists all consumer loans and income.
Typical rates
The European Central Bank publishes monthly average rates on new consumer credit for each euro-area country. In practice, offers for a standard personal loan in 2026 span roughly 4 to 15 percent APR depending on the amount, the term and the borrower's profile. The spread between the cheapest and the most expensive offer for the same person is usually several percentage points, which is the whole reason to compare.
