One rulebook, many national markets
The European Union sets common rules for banks and for consumer credit, and those rules extend to Iceland, Liechtenstein and Norway through the European Economic Area. Even so, a loan is still underwritten under national practice, priced from national funding and secured under national property law.
This page explains the European layer that applies everywhere: passporting, the mortgage and consumer credit directives, payment rules and dispute bodies. Country hubs on this site then cover what differs in each state, from Germany’s Schufa culture to Spain’s non-resident mortgage ratios or Switzerland’s separate, non-EU regime.
Passporting: one licence, cross-border services
A bank authorised in one member state under the Capital Requirements Directive may offer services in all others, either through a branch or directly across the border. In theory a borrower in Portugal can take a loan from a Dutch bank; in practice few banks lend cross-border to consumers.
The reasons are practical. Lenders cannot easily value property abroad, enforce mortgages under foreign land registries or read foreign credit files. Passporting therefore matters most for online banks, payment firms and specialist lenders, while mainstream mortgages remain a domestic business in almost every country.
What passporting means for non-EU citizens
Passporting concerns the lender, not the customer. A non-EU national living legally in Belgium is a Belgian consumer for credit purposes. A non-resident living outside the EU, by contrast, enjoys the same consumer protections only when borrowing from an EU lender under an EU-law contract.
The United Kingdom after Brexit
UK banks lost their passports in 2021. British lenders now need local authorisation to serve consumers in the EU, and many stopped lending to UK citizens living in Spain, France or Portugal. The UK kept its own version of the mortgage credit rules, which has since diverged.
The EU Mortgage Credit Directive
Directive 2014/17/EU governs credit secured on residential property. It requires lenders to assess creditworthiness on income rather than mainly on the property value, to provide a standardised European Standardised Information Sheet, and to give the borrower either a reflection period or a withdrawal right of at least seven days.
Protection for foreign-currency mortgages
Because foreign-currency loans caused heavy losses in Central Europe after 2008, the directive gives borrowers with a loan in a currency other than their income or residence currency a right to convert, or another mechanism limiting exchange risk, and requires regular warnings when the currency moves sharply.
This protection is central for expatriates. A Swiss-franc earner borrowing in euros, or a British pensioner borrowing in euros against a French house, should ask how the lender implements this right, because each member state chose its own mechanism when transposing the directive.
Lender policies for non-residents
Within the directive, lenders keep wide discretion. Non-residents often receive lower loan-to-value ratios, shorter terms and higher margins than residents. Spanish, Portuguese and French banks commonly cap non-resident mortgages well below resident levels, and German banks often decline buyers without German income.
Early repayment and fees
The directive guarantees a right to repay early but lets countries limit compensation to the lender’s fair and objective costs. As a result, early-repayment fees differ widely: France and Spain cap them by law, while Germany allows a calculated indemnity on fixed-rate loans.
The new Consumer Credit Directive
Directive (EU) 2023/2225 replaces the 2008 consumer credit directive. Member states had to transpose it by 20 November 2025, and its rules apply from 20 November 2026. It covers loans up to 100,000 euros, including buy-now-pay-later products and many small loans previously outside the rules.
What changes for foreign borrowers
The new directive strengthens creditworthiness assessment, bans unsolicited credit, limits the use of sensitive personal data and requires member states to cap interest rates or total costs, or adopt equivalent measures. Borrowers also gain a right to human review of automated credit decisions.
Cross-border credit data limits
There is no European credit bureau. Each country runs its own registers, such as Schufa in Germany, BKR in the Netherlands, CRIF in Italy or the Banque de France FICP file. The EU AnaCredit dataset covers loans to companies, not households, so personal histories rarely travel.
The consumer credit rules require non-discriminatory access for lenders to databases in other member states, but the information available varies. In practice a newcomer often starts with an empty local file, regardless of a strong history at home, and needs time to build a record.
Comparing offers across countries
Both directives use the annual percentage rate of charge, calculated by the same formula throughout the EU. That makes APR the most reliable tool for comparing a Spanish and an Irish offer. Still compare insurance, currency and fees separately, because some costs fall outside APR.
| EU instrument | What it covers | Why it matters to foreigners |
|---|---|---|
| Capital Requirements Directive | Bank licensing and passporting | Lets EU banks serve other member states |
| Mortgage Credit Directive 2014/17/EU | Loans secured on homes | Disclosure sheet, reflection period, currency protection |
| Consumer Credit Directive 2023/2225 | Loans up to 100,000 euros | Applies from November 2026, wider scope |
| Payment Accounts Directive 2014/92/EU | Basic bank account right | Access for legal residents without local history |
| SEPA Regulation 260/2012 | Euro transfers and direct debits | Bans refusing an IBAN from another SEPA country |
Bank accounts and payments across Europe
The Payment Accounts Directive gives anyone legally resident in the EU, including people without a fixed address and asylum seekers, the right to open a basic payment account. Banks may still refuse on anti-money-laundering grounds, but they must explain the refusal in writing.
SEPA and IBAN discrimination
The Single Euro Payments Area has grown beyond its 36 original members, adding Western Balkan states and Moldova since 2024. Under the SEPA Regulation, a utility, employer or lender in one country may not refuse an account simply because its IBAN comes from another SEPA country. Report such refusals to the national authority designated for SEPA complaints.
Car finance, leasing and personal loans
Car finance and leasing are offered by captive lenders of carmakers and by banks, almost always to local residents with a local account and income. A foreigner newly settled in Europe usually needs a residence permit, an employment contract and several months of payslips.
Business lending and private banking
Business loans fall outside the consumer directives. Foreign entrepreneurs typically borrow through a local company. Private banks in Luxembourg, Switzerland, Monaco and London lend against investment portfolios to internationally mobile clients, often in several currencies and largely independent of residence.
Step-by-step: borrowing in a European country
The general route below works in most EU countries. Details such as notary involvement, registration taxes and the order of signatures differ, which is why country-level guidance remains essential once the target country is chosen.
- Choose the country and check residence and property rules there.
- Open a local or SEPA account in your name.
- Gather income evidence with certified translations.
- Request offers and compare them on APR and total cost.
- Read the European Standardised Information Sheet in a language you understand.
- Use the reflection period before signing the binding offer.
- Check the lender in the national supervisor’s register before paying anything.
Mistakes and red flags in Europe
Many scams exploit the idea of a borderless European market, presenting fake lenders as passported EU banks. Others copy the names of real banks from one country while operating from another, counting on borrowers not checking registers in an unfamiliar language.
- Assuming EU rules mean identical lending criteria in every country.
- Borrowing in a currency different from your income without a conversion mechanism.
- Expecting a foreign credit history to be recognised automatically.
- Ignoring the November 2026 change in consumer credit rules when comparing older offers.
- Paying an advance fee to a so-called EU-licensed lender whose passport cannot be found in the home supervisor’s register or the EBA register: legitimate passported lenders never charge before disbursement.
Where to complain across borders
FIN-NET, the European network of financial dispute resolution bodies, helps consumers find the competent out-of-court body when the lender is in another country. National supervisors such as BaFin, ACPR, Banco de España or Banca d’Italia keep public registers of authorised firms.
Rate context in 2026
The European Central Bank cut its deposit rate to 2% by June 2025 after a series of reductions. Variable euro mortgages track Euribor, while fixed rates follow longer swap rates, so national pricing differs even under the same monetary policy.
Frequently asked questions about loans in Europe
These answers describe the European framework in 2026. Each member state adds its own rules, and countries outside the EU, such as Switzerland and the United Kingdom, follow separate regimes even when they resemble EU law.
Can a non-EU citizen get a loan in an EU country?
Yes, when legally resident with local income and documentation. Non-residents living outside Europe can usually obtain only mortgages, and with lower financing ratios. Nationality alone is rarely the issue; residence, income currency and credit history drive the decision.
Can I use a loan from my home country to buy in another EU state?
Some banks lend against property in your home country to fund a purchase elsewhere. Lending directly against foreign property is less common. Check that the lender is authorised and that the currency matches your income.
Does the new consumer credit directive apply to mortgages?
No. Loans secured on residential property stay under the Mortgage Credit Directive. Directive 2023/2225 applies to unsecured and other consumer credit up to 100,000 euros, including many instalment and deferred-payment products.
Is borrowing easier in some European countries than others?
Yes. Countries with active non-resident mortgage markets, such as Spain, Portugal, France and Italy, are easier for foreign buyers. Countries with strict income or credit-file requirements, such as Germany and the Netherlands, favour residents with local histories.
Useful organisations and resources
- LexisNexis – EU Mortgage Credit Directive essentials — Legal publisher guidance summarising the directive’s key obligations for lenders, intermediaries and borrowers.
- vLex – Directive 2014/17/EU — Legal research platform giving access to the directive text and related case law across member states.
- EU Monitor – Directive on consumer credit (NL) — Dutch parliamentary monitoring service tracking EU legislative files, including the consumer credit reform process.
Official and legal references
- EUR-Lex – Mortgage Credit Directive 2014/17/EU — Official EU text of the directive on credit agreements for consumers relating to residential immovable property.
- EU Monitor – Consumer Credit Directive 2023/2225 — Overview and text of the new EU consumer credit directive, applying from November 2026 to loans up to 100,000 euros.
- Legislation.gov.uk – Directive 2014/17/EU as adopted — UK National Archives copy of the mortgage directive, useful for comparing the UK’s post-Brexit retained version.